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  • In a welcome development for both plan sponsors and employees, the retirement landscape in the United States has recently witnessed a significant shift. The Internal Revenue Service (IRS) announced a game-changing extension, granting an additional two years for compliance with a pivotal provision under the SECURE 2.0 Act. This transformative legislation, passed in December 2022, introduced a series of changes aimed at reshaping the retirement savings landscape. One of its cornerstones, the Roth catch-up contribution requirement, was initially scheduled to go into effect on January 1st, 2024, impacting workers earning $145,000 or more annually. However, due to the complexities and challenges of implementation, this requirement has now been deferred until 2026.

    The SECURE 2.0 Act

    The SECURE 2.0 Act, short for “Setting Every Community Up for Retirement Enhancement,” represents a landmark legislation seeking to revolutionize how Americans approach retirement savings. At the heart of this Act is the provision requiring high-income workers earning $145,000 or more per year to divert their catch-up contributions to Roth accounts within their employer-sponsored retirement plans, such as 401(k)s. Originally scheduled to take effect in 2024, this provision stirred both anticipation and hesitation within the financial and retirement planning sectors.

    IRS Extends The Compliance Deadline

    Recognizing the legitimate concerns voiced by taxpayers, the IRS has taken a strategic step to extend the compliance deadline for this crucial provision. IRS Notice 2023-62 stipulates that the Department of the Treasury and the IRS have noted the challenges faced by taxpayers in promptly adhering to the new requirement. As a result, an administrative transition period has been implemented, allowing for a smoother and more orderly shift toward compliance. The extension, which pushes the deadline to 2026, affords employers, plan providers, and employees ample time to adapt to the changes and ensure a seamless transition.

    A Win-Win For All Parties Involved

    Extending the Roth catch-up contribution requirement presents a win-win scenario for plan sponsors and employees. Employers and plan providers who faced the daunting prospect of establishing new Roth plans within a tight timeframe can now breathe a sigh of relief. The extra time will enable them to plan and execute the necessary administrative and procedural adjustments without compromising on the quality of implementation. In addition, employees who fall into the high-income bracket will benefit from a more gradual and planned transition, reducing the potential for financial disruptions during the adjustment period.

    The Path Forward

    This extension underscores the government’s commitment to fostering a retirement landscape that is fair, flexible, and conducive to the financial well-being of all citizens. The additional time granted will undoubtedly pave the way for a smoother transition, allowing plan sponsors and employees to navigate the changes confidently and clearly. As we move toward 2026, the horizon of retirement savings stands poised for transformation, offering new opportunities and fresh pathways toward a secure and prosperous retirement future.

    Embracing Change With Confidence – How A PEO Can Be Your Strategic Partner

    As the retirement landscape evolves and the extended deadline for the Roth catch-up contribution requirement approaches in 2026, businesses find themselves at a crossroads of adaptation. Navigating the intricacies of compliance, administrative adjustments, and employee communication demands a holistic approach that aligns with your business’s unique needs. This is where a professional employer organization (PEO) like Group Management Services (GMS) steps in as your strategic partner.

    With expertise in HR, benefits administration, and compliance, a PEO can help you seamlessly transition into the new retirement model. GMS ensures a smooth and successful implementation by guiding you through the technical intricacies of establishing Roth plans to communicate changes to your employees effectively. As you prepare to embrace future opportunities, a PEO empowers your business with the resources, knowledge, and support needed to thrive in an ever-changing landscape.

    Tom Smith, GMS’ Director of Retirement Services, expressed, “Although the deadline for the Roth catch-up contribution deadline has been extended, there are still other provisions that the Secure Act 2.0 requires to be in place starting in 2024 and 2025. A benefit of working with the GMS Multiple Employer Plan is that we ensure your plan complies with the new rules and regulations. We’re also a resource to discuss and answer questions regarding the optional provisions a company may want to implement.”

    Together, we can ensure that your business and your employees are well-equipped to embark on this transformative journey toward a secure and prosperous future in retirement. Contact us today to learn more!

  • If you’re a California employer who’s only just adjusted to a $15.50 minimum wage, brace yourself for more change. The Golden State is gearing up for yet another hike, with the minimum wage set to rise to $16.00 per hour, effective January 1st, 2024. This move, driven by an inflation adjustment, is part of California’s commitment to ensuring fair compensation for its workforce. But what exactly does this mean for employers, and how can you prepare for the upcoming shift? Continue reading to prepare you and your business for this change.

    Beyond The Bottom Line: A Broader Impact

    The ripple effect of the minimum wage increase extends beyond those directly affected by it. While the primary focus is on workers earning minimum wage, the adjustments are bound to have a domino effect throughout the employment landscape. As wage structures shift, companies must reassess pay scales, maintain internal equity, and possibly revisit employee benefits to ensure their workforce remains motivated and engaged.

    White Collar Exemption Gets A Boost

    The minimum annual salary requirement for employees classified under the California white collar exemption will jump to $66,560, or $5,546.57 per month. This change prompts employers to review the classification of these employees, ensuring that both their duties and compensation align with exemption requirements. This meticulous audit will help maintain compliance with the evolving regulations.

    Tools Of The Trade: A Pricier Proposition 

    Industries that rely on employees to provide and maintain their own tools, such as tradespeople and technicians in various sectors, will feel the impact of the wage increase. The minimum wage for these employees will increase from $31 to $32 per hour. Business owners must consider how this change will affect their workforce and budgets, as this shift could lead to reevaluating compensation packages to retain skilled employees.

    Inside Sales Exemption Raises The Bar

    Employees eligible for the inside sales exemption from overtime must now meet a minimum annual compensation of $49,920, up from $48,360. As this exemption allows employers to avoid overtime pay for specific roles, companies should analyze their salesforce’s structure to ensure they remain compliant and avoid potential legal pitfalls.

    Fine-Tuning Premium Calculations

    Minimum wage increases necessitate recalibrating various premium calculations. From split-shift premiums to rates of pay for meal and rest period premiums, paid sick leave, and more – each aspect of compensation intertwined with the minimum wage needs to be reevaluated. This process ensures that employees receive fair and legal compensation while safeguarding employers from potential compliance issues.

    Looking Into The Future

    It’s important to note that this wage increase affects small businesses, not just large corporations. Regardless of size, all employers across the state must adapt to this change. From retail outlets to tech startups, the new minimum wage landscape will impact every aspect of California’s business environment.

    Employers should be prepared for additional adjustments as the state moves forward with its commitment to fair compensation. In October 2023, an announcement is expected to raise the minimum wage for the computer professional exemption from overtime, further shaping the employment landscape. Moreover, the interplay between state and local ordinances complicates matters. Employers must stay vigilant to local wage ordinances exceeding the state minimum, such as the recent increase in Los Angeles to $16.78 per hour.

    Partnering With A PEO: Your Bridge To Navigating California’s Wage Changes

    As California’s employment regulations continue to evolve, the challenges for small business owners multiply. Navigating the intricacies of wage adjustments, compliance nuances, and exemption requirements demands considerable effort and resources. Have you considered partnering with a professional employer organization (PEO)? A PEO like GMS can provide the expertise and support needed to navigate the changing landscape seamlessly. From managing payroll intricacies to staying updated on local ordinances and ensuring accurate exemption classification, a PEO offers the knowledge and resources that small business owners require. By partnering with GMS, businesses can confidently address the impending minimum wage increase and other regulatory changes, allowing them to focus on growth, productivity, and building a resilient workforce in the dynamic California market. Contact us today to learn more.

  • In the age of digitization, data collection and analysis have emerged as indispensable elements for organizational success. People analytics is a powerful tool that empowers you to steer your decision-making with data, anticipate workforce requirements, gauge the efficiency of existing HR strategies, policies, and much more.

    Despite people analytics’ advantages, many organizations have yet to implement it into their workflow. This hesitance largely stems from a scarcity of relevant data and a potential lack of expertise in effectively interpreting the data they possess.

    While data collection, storage, and analysis tasks might appear daunting, with careful planning and a clear sense of purpose, you can profoundly reshape your approach to business planning and provide transformative opportunities for strategic advancement.

    What Is People Analytics?

    People analytics, also known as HR analytics or workforce analytics, uses data-driven insights to inform and optimize various aspects of human resources (HR) and talent management within an organization. It involves collecting, analyzing, and interpreting data related to your employees and their activities to make informed decisions that enhance workforce performance, engagement, and overall organizational success.

    People analytics aims to help business owners and leaders better understand the patterns and trends within their workforce, leading to more effective strategic planning. By analyzing data related to employee demographics, skills, performance, engagement, turnover, and other relevant factors, organizations can gain insights that can help them address challenges, allocate resources efficiently, and identify opportunities for improvement.

    How People Analytics Benefit Your Business

    As a business owner and leader, you’re constantly making decisions that impact your team and the entire organization. While your instincts undoubtedly lead to crucial judgments, utilizing data can expedite your decision-making process and potentially reveal areas for growth. People analytics can:

    1. Minimize hiring mistakes: A poor recruitment decision can lead to costs equivalent to almost 33% of the employee’s initial salary. People analytics can optimize your hiring process by pinpointing top-notch talent that aligns seamlessly with your company and the job role. By dissecting your historical hiring data, you can gain deeper insights into the combination of technical and interpersonal skills needed for a successful hire.
    2. Enhance performance management: By detecting patterns in employee performance, you can forecast potential issues and create tailored growth strategies for employees facing challenges. People analytics equip you with comprehension factors that lead to exceptional performance, so you know which resources are needed for your team to flourish.
    3. Boost employee engagement and retention: People analytics offers a window into employee contentment, gauging levels of employment, and spotting factors that lead to unmotivated staff members. This insight can be invaluable in recognizing areas that require attention, enabling you to take proactive measures to cultivate a motivated workforce.
    4. Learning and development: Utilizing data empowers you to pinpoint skill gaps within your workforce more accurately. Additionally, it allows for a concrete evaluation of the effectiveness of your current learning and development programs. This, in turn, enables you to make informed adjustments and cultivate a more skilled and adept team.
    5. Diversity equity and inclusion (DEI): Data can help you assess where your company stands regarding diversity, equity, and inclusion. It can help you find pay disparities, understand your current demographics, and identify improvement areas.
    6. Workforce planning: Analyzing your organization’s trends and patterns regarding employee turnover can help you predict your future talent needs. Data can help you get a head start on hiring so your business is never caught off guard or short-staffed.

    How To Effectively Harness People Analytics

    Harnessing people analytics requires more than just an eagerness to embrace data; it demands a systematic and strategic approach. As your organization starts its people analytics journey, you’ll need to consider several tasks to lay the groundwork for effective implementation and utilization of data-driven insights:
    Establish a data-driven culture
    The foundation of successful people analytics lies in cultivating a data-driven culture within the organization. This entails fostering an environment where data is valued and seen as essential for making informed choices. You and other leaders on your team must encourage employees to embrace data-driven decision-making and emphasize its role in achieving company goals.

    Define data collection goals

    While data is crucial, not all data is created equal. It’s essential to define clear data collection objectives, which involve identifying the specific areas of the organization where insights are needed the most. Whether it’s employee engagement, performance, turnover, or recruitment effectiveness, having a clear focus ensures that your data collection efforts are purposeful and yield actionable insights.

    Build a data collection infrastructure

    Having a data-gathering plan in place is crucial, which involves setting up the necessary systems and tools to collect relevant information. Implementing surveys, feedback mechanisms, performance-tracking software, and other data sources that align with your defined objectives are ways to build a strong data collection infrastructure. The data should be accurate, consistent, and regularly collected to track changes and trends over time.

    Data storage and management

    Additionally, you must establish robust data storage and management systems to ensure data security, compliance, and accessibility. Collected data must be in a centralized and secure repository, and proper protocols should be in place to manage and protect sensitive information.

    Interpretation and analysis

    Data by itself is meaningless if not properly interpreted. Once you have enough relevant data, the next step is to analyze and interpret it. This involves identifying patterns, trends, and correlations within the data to provide insights into the organization’s challenges and opportunities. Advanced analytics tools, machine learning algorithms, and data visualization techniques can help uncover hidden insights.

    Storytelling with data

    The next step is transforming data analysis into a coherent narrative that resonates with stakeholders. Translating data into a compelling story helps leaders understand the implications and make informed decisions based on the insights provided by the data.

    Data-driven decision-making

    The ultimate goal of people analytics is to influence business decisions with data. The insights obtained should guide HR strategies, talent management, workforce planning, and overall business strategies. From employee engagement initiatives to leadership development programs, every aspect of the organization can benefit from informed decision-making rooted in data.

    Iterative approach

    People analytics is not a one-time endeavor; it’s an ongoing process. Organizations should continuously collect, analyze, and refine their data collection strategies. Regularly revisiting data collection goals, adjusting metrics, and updating analysis methodologies ensures your insights remain relevant and actionable.

    People analytics demands substantial effort to truly make a meaningful impact on your business. It’s not a venture you can initiate and leave to operate independently. It’s a strategic initiative that should include key members of your staff and undergo continuous enhancement. Despite the initial investment, the advantages of leveraging people analytics outweigh the time spent on setup.

    How GMS Can Help

    Implementing proper data collection can be an overwhelming task. With your many pressing responsibilities, it can be an added burden you may not have time for. Partnering with a professional employer organization (PEO) like GMS can relieve some of this burden.

    GMS Connect, our human resources information system (HRIS), is a software that collects and reports all employee data in a centralized hub. Our system encompasses payroll, benefits, HR, recruiting, performance management, and more – covering the entire HR spectrum from hire to retire in one platform.

    The process of collecting and managing data doesn’t have to be challenging. Our experts are ready to relieve your administrative workload so you can focus on the aspects of your business you enjoy most. Contact us today, and let us simplify your data collection and analysis process.

  • It’s no secret that attracting and retaining top talent is challenging for businesses of all sizes and industries. However, many companies understand the value of having exceptional employees and prioritize it during their recruitment efforts.

    In the ever-tightening labor market, business owners have to shift their hiring strategies away from traditional efforts to remain competitive. Traditional hiring processes often lean on degree requirements and limit the number of eligible applicants. While you may attract talent that has technically met your company standards, they may still lack the relevant experience to be successful in the role. Only 53.7% of the US workforce has some college background, meaning traditional job requirements weed out nearly half the workforce from the start.

    Many companies have adopted skills-based hiring strategies to combat this issue and cast a broader net of workers. Factors contributing to this shift include:

    1. Structural change: In the last decade, the perpetual demand for a skilled workforce has outpaced the availability of talent. In response, employers have had to reevaluate the significance of traditional degree requirements. The focus has pivoted towards identifying individuals with the specific skill sets needed to excel in roles, irrespective of any degrees they may or may not hold.
    2. Cyclical reset: The unprecedented upheaval caused by the COVID-19 pandemic accelerated the embrace of skills-based hiring practices. The abrupt urgency to secure adept professionals prompted many companies to temporarily set aside stringent degree requirements and acknowledge that practical expertise often trumps theoretical education, particularly in times of rapid change.

    What Is Skills-Based Hiring?

    Skills-based hiring removes previously standard hiring benchmarks, such as college majors and degrees, from the screening process to focus on a candidate’s specific skills and competencies. In the past, the hiring process revolved around education qualifications, specific credentials, and prior experience to evaluate candidates. The concept of skills-based hiring has gained significant traction, particularly for entry-level and mid-career positions.

    So, what sets skills-based hiring apart? To put it simply, it embraces a fresh perspective on career progression. Skills-based hiring shifts the focus from more generalized and often arbitrary markers to a more nuanced candidate evaluation.

    It recognizes that a candidate’s potential exceeds traditional qualification confines and values the specific capabilities and proficiencies they can bring to the table. This hiring method enables you, as an employer, to make more informed hiring decisions based on your company’s particular needs. As a result, this approach widens the pool of capable prospects and opens opportunities for individuals who are traditionally overlooked due to their unconventional career paths.

    Advantages Of Skills-Based Hiring

    Recruiting new talent comes with a hefty price tag. In addition to the time and money you invest in the hiring process, when your team is short-staffed, the workload on existing employees increases, creating significant stress that can impact productivity. Though it’s tempting to rush through the hiring process, it’s important to note that however costly the process is, a bad hire will cost you significantly more in the long term. The average cost of a bad hire is nearly 30% of the employee’s salary. Additionally, a bad hire can be detrimental to your company’s culture, staff morale, and productivity. Take the time to find the right candidate for your company’s needs.

    Skills-based hiring allows you to attract more quality candidates and significantly reduce mis-hire rates. Companies that have adopted skills-based hiring report that their mis-hire rates decreased by nearly 25%. In addition to the improved quality of your candidates and reduced number of mis-hires, a skills-based approach can:

    • Reduce hiring costs: Opting for skills-focused hiring can expedite the recruitment timeline. This decreases the overall hiring timeline and translates to substantial cost savings for your organization. Moreover, adopting this approach draws in candidates with the necessary expertise to be successful contributors. They’ll require little-to-no training and a significantly shorter onboarding process, saving you time and money.
    • Increase employee performance and productivity: Companies prioritizing skills-based recruitment are better positioned to discover employees who consistently aim for excellence across all their responsibilities. A skills-based workforce tends to surpass performance benchmarks by proactively seeking avenues for enhancement.
    • Diversify your staff: College is becoming increasingly more expensive. In the last ten years alone, the price has increased by nearly 25%. Additionally, people from historically marginalized groups are less likely to have college degrees. A skills-based approach lowers the barrier of entry while still attracting qualified candidates.
    • Assist with retention: Workers in positions that match their skills and credentials tend to find greater satisfaction in their roles. Skills-based hires stay at companies more than 34% longer than employees with traditional degrees and career paths.

    Writing A Skills-Based Job Description

    Steering clear of conventional job descriptions and prerequisites might appear daunting at first. However, there are effective ways to draw competent and high-caliber candidates without relying on these customary filtering methods. Embracing a skills-based approach doesn’t mean discarding requirements altogether, rather, a shift in perspective. Through a skills-based job description, you can emphasize both hard and soft skills, industry or position-specific expertise, and much more.

    Writing a skills-based job description should:

    1. Prioritize specific needs: Begin by clearly defining what the position demands. Provide an outline of the expectations and daily responsibilities the new hire will handle. This involves pinpointing hard skills (such as technical expertise or programming skills) and soft skills (such as problem-solving and communication). By concentrating on your desired outcomes, you can craft a job description that spotlights the essential skills and proficiencies, going beyond a four-year degree, which may or may not be directly related to the role.
    2. Relax your language: Instead of fixating on “requirements,” lean towards “responsibilities.” In the United States, positions that emphasize responsibilities instead of strict requirements witness a 14% increase in applicants.
    3. Keep it short and to the point: Time is of the essence; candidates spend a mere 14 seconds scanning a job post before deciding whether or not they will apply. Optimize this window by arranging the most crucial and captivating details first. Keep your message brief, between 300-700 words, and utilize bullet points wherever possible.
    4. Avoid clichés: Unless your business utilizes quirky phrases regularly, steer clear of using worn-out terms such as “rockstar,” “shining star,” or “ninja.” Seasoned experts seek clarity about your company’s identity and the role’s expectations, and the presence of clichés can swiftly disengage potential candidates.
    5. Be as straightforward as possible: Though being concise is crucial, make it a priority to embrace clarity. Be as specific and detailed as possible. Ambiguity or omitting critical information about your company or the position is the best way to attract a bad hire.
    6. Specify the location: As the job market evolves to encompass remote, hybrid, and in-person roles, it’s imperative to outline your organization’s preferences within the job description. This will quickly weed out candidates who don’t align with the position’s needs.

    By embracing these strategies, you can attract a wider talent pool and engage potential candidates more effectively, ensuring your workforce remains successful.

    Let Us Help

    Recruiting, training, and retaining employees has never been more challenging for small and mid-sized businesses. Creating a job ad, finding the right candidate, and providing opportunities for employee development are significant expenses.

    Partnering with a professional employer organization (PEO) like GMS can take the administrative burden out of recruiting and hiring so you can focus on other aspects of your business. With our employee training and recruiting services, we can streamline the hiring process. Our applicant tracking system tracks every part of the hiring process so you know what platforms candidates are coming from and how long the process takes for your organization. Contact us today, and let us help you find your next hire.

  • In a progressive move towards promoting fair wages and transparency in the workplace, Illinois has set a significant precedent by passing pay transparency requirements. On August 11th, 2023, Governor J.B. Pritzker signed a bill that will reshape how employers communicate compensation details to potential hires. This transformative legislation, House Bill 3129, aims to bridge the information gap between employers and job seekers, ensuring that pay scales and benefits are clearly outlined in job postings, thus fostering a more equitable job market.

    The Path To Pay Transparency: A New Era Unveiled

    Starting January 1st, 2025, employers in Illinois with at least 15 employees will be obligated to disclose pay scales and benefits for positions within their job postings. This move echoes a broader societal shift towards greater transparency, emphasizing openness and fairness throughout employment.

    House Bill 3129 introduces a compelling requirement for employers to furnish the anticipated pay scale and benefits in their job postings. This provides job seekers with a comprehensive understanding of the potential compensation package, allowing them to make informed decisions about their career prospects. This fosters trust and honesty between employers and applicants and lays the groundwork for a more equitable job market where candidates have the knowledge they need to negotiate fairly.

    Inclusivity And Impact: Who And What Does It Apply To?

    The law’s reach extends to a broad spectrum of job positions. If a job is to be partially performed in Illinois or if the employee is expected to report to an Illinois-based supervisor, office, or work site, then the law’s provisions apply. This ensures that the information asymmetry between employers and employees is addressed consistently and uniformly.

    However, the legislation’s impact doesn’t just stop at pay scales. The definition of “benefits and other compensation” under House Bill 3129 includes various incentives, such as bonuses and stock options, reflecting the comprehensive nature of the law. Employers are tasked with providing a holistic view of the compensation package, fostering greater clarity for potential hires.

    Navigating Compliance And Implementation

    To meet the requirements of the law, employers can include a hyperlink within job postings, redirecting candidates to a publicly viewable webpage containing the pay scale and benefits information. This innovative approach marries technology with transparency, streamlining the communication of crucial details while maintaining the user-friendliness of the application process.

    For those employers utilizing third-party platforms for job postings, the responsibility of including the necessary information lies with both parties. Employers must provide the pay scale and benefits to the third party, which becomes accountable for its inclusion. This collaborative effort ensures that vital details are communicated accurately.

    Tori Moldovan, PHR, GMS’ Client Services Manager, expressed, “Pay transparency laws make you think differently when looking at your employee base. When you have to consider items such as the pay scale and benefits for the position, it forces you to look at your organization as a whole. These will be posted, so current employees will be able to see what you’re offering as well. If they aren’t at that mark with current employees, it could lead to other issues for employee retention and wage inequality that may be brought to light.

    From a compliance standpoint, employers that fail to adhere to pay transparency laws in Illinois can face up to $10,000 in penalties for repeat violators. It’s important to ensure you are following the guidelines set forth by the state.”

    Empowering Employees And The Role Of The Illinois Department Of Labor

    To strengthen employee empowerment, House Bill 3129 also mandates employers to notify current employees of all promotional opportunities arising within 14 days of external postings. This promotes internal growth and helps in fostering a motivated and loyal workforce.

    The Illinois Department of Labor (DOL) is a guardian of compliance, empowered to initiate investigations into potential violations. Whether triggered by individual complaints or the department’s discretion, this measure underscores the state’s commitment to upholding pay transparency and ensuring its effective implementation.

    The Road Ahead: A More Fair And Transparent Job Market

    Illinois’ stride towards pay transparency is a significant leap forward in reshaping the job market dynamics. By embracing open communication of pay scales and benefits, the state sets a powerful example for other jurisdictions to follow. With the law’s implementation set for January 1st, 2025, the coming years promise to be transformative, creating a job market characterized by equity, trust, and empowerment for all.

    As Illinois paves the way, it’s not just pay scales and benefits being illuminated; it’s a brighter future for employment, one built on the principles of transparency and fairness. The journey toward pay equality has just taken a giant stride, and the destination looks promising.

    How A PEO Can Be Your Partner In Pay Transparency

    Embracing pay transparency is a legal obligation and a strategic move towards a fairer and more attractive workplace. As Illinois businesses gear up to navigate the new era of pay disclosure, a professional employer organization (PEO) like GMS can be your guiding light.

    PEOs specialize in managing HR functions, ensuring compliance, and simplifying complex tasks such as pay scale communication. We help you seamlessly integrate the required pay transparency measures into your job postings, taking the weight off your shoulders and allowing you to focus on what you do best – running your business. By partnering with GMS, you ensure compliance and foster a culture of transparency and employee trust. As the Illinois pay transparency law approaches, GMS can be your trusted partner, providing you stride confidently into a future where fairness and openness define your workplace. Contact us today to learn more.

  • In a move that could reshape the landscape of the construction industry, the U.S. Department of Labor (DOL) issued a significant final rule on August 8th, 2023. This rule aims to raise the prevailing wage standard for approximately one million construction workers operating under the federal Davis-Bacon Act. This long-awaited change comes as a response to the evolving dynamics of the construction sector, including the effects of the Bipartisan Infrastructure Law of 2021 that fueled federal infrastructure projects nationwide. Continue reading to dive into the details and implications of this pivotal development.

    Protecting Workers’ Interests

    At its core, the Davis-Bacon Act, enacted in 1931, is a testament to the government’s commitment to safeguard the welfare of construction workers. The act mandates the payment of locally prevailing wages and fringe benefits on federal contracts for construction projects exceeding $2,000. This ensures that contractors don’t undercut wages, thereby protecting local standards and providing a fair wage for workers.

    Revitalizing Prevailing Wage Standards

    The new final rule seeks to revitalize the prevailing wage standards by introducing a range of enhancements. Among them, the DOL gains the authority to adopt prevailing wages determined by state and local governments, offering a more localized and relevant approach. In addition, the rule reintroduces a three-step process to identify the prevailing wage rate for different worker classifications, ensuring that wage rates reflect the majority’s income while minimizing the undue influence of excessively low wages.

    Strengthening Workers’ Rights

    One of the most noteworthy aspects of the new rule is the incorporation of anti-retaliation provisions. These provisions are designed to protect workers who raise concerns about wage violations from facing any form of retaliation. Moreover, the rule empowers the DOL to withhold funds from federal contractors who fail to provide the rightful wages to their employees. This emphasizes the importance of fair wages and offers a practical means of enforcement.

    Balancing Wage Growth And Inflation

    A pertinent concern in any wage adjustment is the potential impact on inflation. However, recent research and analysis by the DOL indicated that wage increases, particularly for lower-income workers, do not necessarily result in significant economy-wide price hikes. In fact, inflation-adjusted wages for nonsupervisory construction workers have experienced a healthy increase of 2.4% over the past year. This insight counters the notion that wage growth inevitably leads to inflationary pressures.

    Embracing Change In A Shifting Landscape

    The construction industry has evolved dramatically since the Davis-Bacon Act’s inception over nine decades ago. The industry’s complexity, diversity, and regional disparities have all called for reevaluating prevailing wage standards. With the final rule’s emphasis on flexibility through state and local determinations, the government acknowledges the need to tailor wages to the unique dynamics of each locale.

    Benefits Of Partnering With A PEO 

    In this era of progressive change, where the construction industry undergoes a transformative shift in prevailing wage standards, the role of a professional employer organization (PEO) becomes even more invaluable. A PEO brings a wealth of expertise in navigating intricate wage regulations, ensuring compliance with evolving laws, and advocating for the welfare of employers and employees. With its adept handling of payroll management, benefits administration, and legal intricacies, a PEO like GMS is a strategic partner in enabling construction businesses to adapt to the new Davis-Bacon Act rule seamlessly.

    By entrusting GMS with the intricacies of HR management, construction companies can focus on their core operations, confident in the knowledge that they are upholding fair wages, workers’ rights, and regulatory requirements. As the construction landscape evolves, embracing the collaborative expertise of a PEO can be the cornerstone of sustained success, allowing businesses to weather changes and thrive in a dynamic industry. Contact us today to learn more.

  • In a significant stride towards enhancing the rights and protections of freelance workers, the city of Los Angeles, California, has enacted a groundbreaking ordinance poised to redefine the landscape for independent contractors in the city. The Freelance Worker Protections Ordinance, which took effect on July 1st, 2023, is a resounding win for freelance workers and is aligned with the city’s commitment to ensuring fair treatment and equitable compensation for all workers.

    Defining Freelance Workers

    Under the new ordinance, the term “freelance worker” has been meticulously defined, encompassing individuals and entities engaged as independent contractors to provide services in exchange for compensation. The ordinance explicitly excludes certain professions requiring written compensation agreements, such as attorneys, architects, and engineers. Similarly, app-based transportation and delivery drivers, who have been the subject of much debate in recent times, are also exempt from the scope of this ordinance.

    At its core, the ordinance aims to establish fundamental rights and safeguards for freelance workers in Los Angeles. The following are key provisions that promise to reshape the freelancer landscape in the city:

    1. Basic written contract requirement: The ordinance mandates that a basic written contract between the freelance workers and the hiring entity must be in place. Even in cases where an oral contract exists, the hiring entity must provide a written contract. This contract must detail essential information, including contact details of both parties, services provided, compensation terms, and payment schedule.
    2. Timely payment assurance: The ordinance sets a clear standard for timely payment. If the contract specifies a payment date, the hiring entity must fulfill the payment in full by that date. In cases where no specific date is mentioned, payment must be issued no later than 30 days after completion of the work.
    3. Record keeping: Freelance workers and hiring entities must maintain written records for at least four years. These records must include contracts, payment documentation, and other evidence demonstrating adherence to the contract terms.
    4. Protection from retaliation: The ordinance safeguards freelancers from any form of punishment, retaliation, or adverse action by the hiring entity in response to exercising their rights under the law.
    5. Addressing violations: Freelancers are empowered to take action against violations. They can file a civil lawsuit seeking damages or file a complaint with the Bureau of Contract Administration. The ordinance affirms their right to pursue both avenues.
    6. Accountability for hiring entities: The ordinance outlines the responsibilities of hiring entities to respond to complaints and requests from the Bureau of Contract Administration. Failure to comply within the stipulated time frame can result in legal repercussions.
    7. Damages and remedies: Successful freelance worker litigants are entitled to a range of damages, depending on the nature of the violation. These include reasonable attorneys’ fees, injunctive relief, and other remedies deemed appropriate by the court.

    Diving Deeper Into The New Ordinance

    Los Angeles’ Freelance Worker Protections Ordinance transcends mere regulation, a testament to the city’s commitment to fostering a fair and equitable work environment for all. With a wide application encompassing many businesses and freelance workers, its significance cannot be underestimated. The ordinance underscores the need for companies to be proactive in reviewing their practices, ensuring compliance with its provisions, and upholding the rights and dignity of freelance workers.

    This ordinance sets a powerful precedent for other jurisdictions in an age where the freelance economy is rapidly evolving. It signals a paradigm shift towards recognizing the vital contributions of freelance workers and valuing their rights on par with traditional employees. Los Angeles’ stride towards worker empowerment is not just commendable, it’s a blueprint for a more inclusive and just future of work.

    Partner With A PEO

    Amidst the transformative landscape shaped by Los Angeles’ pioneering Freelance Workers Protections Ordinance, businesses should consider partnering with a professional employer organization (PEO). PEOs like Group Management Services (GMS) specialize in providing comprehensive HR solutions, ensuring compliance with ever-evolving labor regulations. Businesses can streamline their administrative processes by partnering with GMS, efficiently manage freelance worker contracts, and maintain meticulous records.

    As the ordinance ushers in a new era of freelancer empowerment, a PEO can serve as a strategic partner, helping businesses navigate the complexities and intricacies of the regulation while fostering an environment where freelance workers and hiring entities thrive harmoniously. With GMS’ expertise, businesses can confidently embrace the spirit of the ordinance and build a foundation of fairness, transparency, and compliance in their freelance engagements. Contact us today to learn more.

  • The COVID-19 pandemic dramatically reshaped how we work, ushering in a remote work era that allowed employees across various sectors to carry out their roles from the comfort of their homes. However, a significant shift is underway as the pandemic gradually loosens its grip and we navigate the road to recovery. President Joe Biden is leading the charge to bring federal employees back to their offices, marking a pivotal moment in our work culture.

    A Presidential Call To Action

    President Biden’s recent call for federal government agencies to increase in-person work this fall represents a turning point in our approach to work post-pandemic. This directive aligns with President Biden’s commitment to reinstate in-person positions for most federal workers, a promise he reiterated in his State of the Union address in March 2022.

    Addressing Workplace Capacity And Culture

    The push for in-person work is not just a symbolic gesture; it stems from a practical need to optimize workspace capacity. A Government Accountability Office report revealed that many federal agencies utilized only a fraction of their headquarters’ capacities, with 17 out of 24 agencies using around 25% or less. President Biden’s call to action seeks to maximize the potential of these workspaces, enabling better collaboration, communication, and efficiency.

    In addition, the President’s directive emphasizes the significance of in-person work for fostering a strong workplace culture. As remote work provides flexibility, in-person interactions are key to nurturing relationships, boosting team morale, and cultivating a sense of belonging.

    The Corporate Shift: A Tale Of Success

    President Biden’s call for a return to the office mirrors a broader trend taking place across the corporate landscape. Many private sector companies have been phasing out remote work and advocating for employees to rejoin the office environment, citing the need for collaboration and preserving workplace culture. A survey found that employees who returned to the office reported higher job satisfaction, increased effectiveness, and heightened productivity. This positive trend underscores the potential benefits that in-person work can bring to organizations and their employees.

    Navigating Challenges And Considerations

    While the push for in-person work carries numerous advantages, it does not come without its challenges. Some federal employee unions have resisted the return, seeking to uphold remote work arrangements. Balancing employees’ preferences, the interests of unions, and the administration’s goals will require careful negotiation and strategic planning.

    Positioning For Success – Partner With A PEO

    In an era of unprecedented challenges and transformative change, the call for in-person work represents an opportunity for business owners to reimagine their workplaces and foster a sense of unity, collaboration, and innovation. By staying attuned to President Biden’s directive and the broader shift toward in-person interactions, business leaders can strategically adapt their operations to create a vibrant and thriving workplace culture.

    Embracing flexible approaches, such as hybrid models that combine the best remote and in-person work, can help balance employee preferences and the benefits of face-to-face interactions. As you chart your course forward, consider leveraging technology to support seamless communication, emphasizing the value of team gatherings, and prioritizing employees’ well-being in this evolving landscape.

    Have you considered partnering with a professional employer organization (PEO)? To navigate this transition seamlessly and maximize its benefits, businesses can turn to the expertise and support of GMS, a certified PEO (CPEO). We offer comprehensive solutions tailored to the evolving needs of your workforce, helping you stay adaptable, compliant, and focused on your core business goals.

    The following are how a PEO can assist in this transition process:

    • Compliance guidance: As workplace regulations evolve, PEOs stay up-to-date with the latest laws, ensuring your business remains compliant during the in-person work transition. 
    • Employee benefits management: PEOs can help optimize your employee benefits package to meet the changing needs of your workforce, enhancing job satisfaction and retention. 
    • Flexible HR solutions: PEOs offer flexible human resources solutions that can be tailored to your unique needs, whether it’s creating hybrid work models, adapting policies, or fostering a positive workplace culture. 

    Contact us today to learn more. 

  • In an inspiring move towards enhancing employee rights and creating compassionate workplaces, Illinois has taken a significant step by amending the Victims’ Economic Security and Safety Act (VESSA). This change, signed into law by Governor J.B. Pritzker on July 28th, 2023, brings about a crucial expansion in the leave available to employees dealing with the aftermath of a family member’s death due to a crime of violence. The amendments to VESSA took effect immediately, signaling a state committed to supporting the well-being of its citizens in times of extreme hardship.

    Comprehensive Coverage

    Under the original VESSA, Illinois employers were required to provide unpaid leave to employees who were victims of domestic, sexual, or gender violence and crimes of violence. This encompassed not only the victims themselves but also their affected family or household members. This coverage highlighted the state’s dedication to fostering safety and security within its workplaces and communities.

    Amendments: A Deeper Level Of Compassion

    The newly introduced amendments further illustrate Illinois’ commitment to empathy and support for its residents. Before these changes, employees were eligible for leave for specific reasons, including medical attention, counseling services, victim services, legal assistance, and safety planning. However, a crucial layer of support has been added with the amendments.

    Now, employees are granted leave for more intimate and sensitive reasons, including the following: 

    1. Attending funerals or wakes: Employees can now take time off to attend the funeral or alternative memorial arrangements of a family or household member who was a victim of a crime of violence. 
    2. Arrangements due to death: Recognizing the responsibilities that arise from a family member’s passing, the amendments permit employees to take leave to make necessary arrangements after a crime of violence-related death. This acknowledges the logistical challenges that families face in such difficult times. 
    3. Grieving process: Perhaps the most poignant aspect is acknowledging the grieving process. Employees are now entitled to leave time specifically to grieve the loss of a family or household member who was killed in a crime of violence. This change reflects the understanding that mourning is an essential part of healing. 

    Balancing Work And Healing 

    The amendments take into account the size of the employer. The duration of leave varies based on the number of employees in the organization. While this allows for flexibility, it also provides that businesses, particularly smaller ones, can manage operations effectively.

    The amount of VESSA leave an employee is entitled to depend on the size of the employer as follows:

    • An employee working for an employer with up to 14 employees is entitled to four work weeks of leave during any 12-month period. 
    • Employees working for an employer with at least 15, but not more than 49, are entitled to a total of eight work weeks of leave during any 12-month period. 
    • An employee working for an employer with at least 50 employees is entitled to 12 work weeks of leave during and 12-month period. 

    Moreover, the amendments acknowledge that certain situations require a more immediate response. If an employee needs to take leave for the newly added reasons related to crimes of violence, they are entitled to a shorter period of unpaid leave. This enables them to attend to the immediate aftermath without compromising their jobs or financial stability.

    In Sync With Existing Laws

    Conscious of the interplay between employees’ protection laws, it’s essential to understand the need for synergy across various regulations to safeguard workers’ rights. A prominent example is the Illinois Family Bereavement Leave Act (FBLA), which establishes a distinct framework for bereavement leave. Under FBLA, qualified employees are eligible for up to two weeks of unpaid leave following the death of an immediate family member. Notably, the provision extends up to six weeks of leave in the event of the death of more than one covered family member within 12 months. The key distinction lies in eligibility criteria: FBLA covers only employees qualified for federal Family and Medical Leave Act (FMLA) benefits, whereas the scope of VESSA encompasses all Illinois employees, accentuating the state’s commitment to protection for all.

    However, the amendments do not lead to overlapping entitlements. Instead, they complement each other effectively. If an employee is eligible for FBLA leave, the amended VESSA does not provide additional bereavement leave beyond what is already granted. This ensures a fair distribution of leave entitlements.

    Unlocking Support For Small Business Owners

    In the dynamic landscape of Illinois’ evolving employment laws, small business owners face the dual challenge of maintaining compliance while nurturing their ventures. As the recent amendments to the Illinois VESSA exemplify, the legal landscape can shift rapidly, requiring business owners to remain compliant and informed. This is where a professional employer organization (PEO) can help business owners in Illinois. By partnering with a PEO like GMS, business owners can access HR experts who keep you compliant with employment regulations.

    With our comprehensive services, including HR support, benefits administration, payroll, and risk management, small businesses can confidently navigate employment laws’ complexities. Contact us today to learn how we can empower your business to thrive in evolving regulations.

  • Running a small business is no small feat. It requires dedication, passion, and an unwavering commitment to success. In this dynamic and competitive landscape, where every decision matters, small business owners must embrace a strategic approach that can elevate their venture to new heights. One such indispensable strategy is performance management. Often underestimated, performance management is key to unlocking a business’s full potential, especially for those operating on a smaller scale.

    The Essence Of Performance Management

    Performance management is not just another corporate buzzword; it’s a comprehensive strategy that helps businesses align their workforce’s efforts with their goals, ensuring improved productivity, employee engagement, and overall success. Performance management involves setting clear expectations, regularly monitoring progress, providing constructive feedback, and recognizing achievements. Performance management aims to create an environment where individuals can perform to the best of their abilities and align with the organization’s overall goals.

    Why Business Owners Should Embrace Performance Management

    1. Goal alignment: Effective performance management ensures that every employee understands their role in achieving the company’s objectives. This alignment fosters a sense of purpose and direction among the workforce, driving them to contribute meaningfully to the organization’s success.
    2. Continuous improvement: Performance management empowers employees to refine their skills and work habits through ongoing monitoring and feedback. This culture of continuous improvement translates into enhanced efficiency and innovation, contributing to the company’s competitiveness.
    3. Employee engagement and satisfaction: When employees feel that their efforts are acknowledged and their growth is supported, they become more engaged and satisfied. This positive atmosphere not only boosts productivity but also reduces turnover rates.
    4. Effective communication: Regular performance discussions foster open lines of communication between employees and management. This dialogue allows for identifying challenges and opportunities, leading to quicker problem-solving and optimal decision-making.
    5. Recognition and motivation: Performance management provides a platform for recognizing and celebrating achievements. Public acknowledgment of hard work and dedication instills a sense of pride and motivates employees to excel further.
    6. Data-driven insights: Collecting and analyzing performance data provides valuable insights into individuals’ and teams’ strengths and weaknesses. These insights inform strategic decisions, resource allocation, and future planning.

    Amy Latchaw, GMS’ Client Services Manager, added, “Performance management is one of the most important HR functions an organization can invest time and resources in. Effective performance management helps you better understand your employees, their talents and shortcomings, and what’s needed to achieve the organization’s goals.”

    The Power Of Clarity And Alignment 

    In the world of small business, resources are often limited. Therefore, ensuring that every effort is aligned with the business’s strategic direction is paramount. Performance management provides the tools to set clear goals, expectations, and priorities. When everyone in the organization knows what’s expected of them and how their contributions fit into the bigger picture, it breeds a sense of purpose that drives productivity.

    Nurturing Accountability And Ownership

    For a small business to thrive, accountability cannot be an afterthought. Performance management instills a sense of ownership within employees. When individuals take ownership of their tasks and projects, they are more likely to be invested in their success. This sense of responsibility boosts productivity and fosters a culture of innovation, where employees feel empowered to take initiative and contribute ideas.

    Continuous Learning And Adaptation

    In today’s fast-paced business landscape, adaptability is key. Small businesses must be agile in responding to changes in the market, technology, and consumer preferences. Performance management facilitates a cycle of continuous learning and improvement. Regular check-ins, performance evaluations, and feedback sessions allow employees to reflect on their progress, identify areas for growth, and make necessary adjustments. This iterative process ensures that the business remains relevant and competitive.

    Empowering Employee Development

    Employees are the backbone of any organization, and their growth directly impacts the business’s success. Performance management enables small business owners to identify high-potential individuals, address skill gaps, and provide targeted training and development opportunities. By investing in their team’s growth, business owners enhance their employees’ capabilities and create a loyal and motivated workforce.

    Building A Culture Of Recognition

    Recognizing and appreciating hard work is a cornerstone of effective performance management. Small business owners can harness the power of positive reinforcement to boost morale and foster a culture of appreciation. Employees who feel valued and acknowledged for their contributions are more likely to remain engaged and motivated.

    The PEO Advantage In Performance Management

    As the journey toward small business success continues, it’s essential to recognize the valuable role that a professional employer organization (PEO) can play in enhancing performance management efforts. PEOs bring a wealth of expertise and resources to the table, assisting small business owners in streamlining their performance management strategies. From offering guidance on goal setting and employee development to providing tools for data-driven decision-making and comprehensive HR solutions, a PEO like GMS can be a partner that propels your business toward its goals.

    By alleviating administrative burdens and providing a tailored approach to performance management, GMS empowers small business owners to focus on what truly matters – driving growth, fostering innovation, and nurturing a thriving workforce. So, as you embark on your journey of maximizing success, consider the strategic advantage that a PEO can bring to your performance management endeavors, leading your business toward a brighter and more prosperous future. Learn more about our performance management services and contact us today!