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  • On November 19th, President Biden’s $1 trillion Infrastructure Law (Infrastructure Investment and Jobs Act) was passed by the House after months of delays and will now be sent to the Senate to approve. The White House is projecting that this bill will create 2 million jobs over the coming decade. However, many are worried about where the funding will come from. 

    This bill will deliver $550 billion of new federal investments in American infrastructure over five years, which will touch everything from bridges and roads to the nation’s broadband, water, and energy systems. Also included in this bill are expanded child-care, paid leave, expanded healthcare coverage, an extension on child tax credit payments, green energy investments and tax credits, universal pre-K, affordable housing, and various other programs.  

    One upside for some is that this could create many jobs in construction, transportation, and energy. The New York Times goes on to describe that if there isn’t enough labor to keep up with the demand, then Biden’s plans could be set back. In an already-tight labor market, employers can expect even more hiring hurdles, should the bill be approved. 

    Employers in the construction, transportation, and energy industries should be proactive in recruiting talent and growing their workforce. GMS can help by creating a hiring plan for your company, streamlining your onboarding process, and ensuring a seamless payroll. Contact us today.  

  • Inflation has been rising and studies have shown that unfortunately, inflation hurts low-income Americans and small business owners the most. According to Fox Business, prices for consumers have surged 6.2% in October, compared to the previous year. Moreover, core prices, which exclude the more volatile measurements of energy and food, rose 4.6% over the past year, which was the largest increase since 1990. Prices have risen 0.9% from September to October.  

    Not only is the rise of inflation hard for consumers, but it can also be detrimental to small businesses. It is proven that when inflation is high, small businesses have less buying power – which means you don’t have as much freedom to search for new hires and expand your business in the ways you usually do when you have extra money to spend. As Inflation Data explains, owners of small businesses have a greater financial risk when inflation is high.  

    Small business owners may not have the same access to financial cushions as big businesses do. This means that money will come directly from the company and there will be little money to expand the business at the end of the year. Another problem that small businesses will face is whether to raise their prices and have customers upset or leave the prices and lose their own money. The last option is to switch vendors that cost less – which might mean that they are choosing one that provides lower quality. 

    Due to COVID-19, small business owners have been hit so hard that they are just now recovering from the money loss and high inflation rates are making them realize they won’t be able to recover the way that they were hoping to. This makes it so important to figure out where you need to focus your money and efforts.  

    Staying savvy during these hard times is crucial when costs are rising. Trying to find time to focus your efforts on improving your core business can be difficult, too. You may want to reevaluate your healthcare plan, workers’ comp., and so forth. Contrary to popular belief, outsourcing all of these administrative functions can help you save time and money in the long run. This will give you more free time to recruit and focus on where you think your company has room to grow. 

    If you’ve been contemplating how your business can alleviate some of its financial strains, whether it’s saving on administrative fees or finding a better healthcare option, now is the time. Contact us today. 

  • The controversial COVID-19 vaccine mandate had countless private-sector workplaces with 100 or more employees concerned over the testing and vaccine mandate. After a lawsuit was filed Friday by a group of plaintiffs, including Louisiana Attorney General Jeff Landry, the order has been suspended by the court. The court ordered that OSHA, ”take no steps to implement or enforce” the ETS “until further court order.”  OSHA has suspended activities accordingly. 

    A three-judge panel of the Fifth Circuit Court of Appeals slammed Biden’s end-justifies-the-means approach. The constitution limits what the federal government can make people do, even in emergencies.   

    Because similar challenges to the emergency temporary standard (ETS) have been brought in all but one of the 11 federal circuit courts of appeals, the U.S. Judicial Panel on Multidistrict Litigation will conduct a lottery as required by statute, pursuant to 28 U.S.C.A. §2112 (a)(3), likely this week, to select which federal circuit will hear appeals in the numerous challenges, including with respect to the Fifth Circuit’s order. Any outcome from the circuit selected in the lottery process may and likely will be appealed to the U.S. Supreme Court.  

    There are many other details that the public deems unconstitutional, which the NY Post covers in detail. For example, companies right under the 100-employee mark do not apply for this new order along with people who do not work or work at home. This case is headed for the US Supreme Court where this is unlikely to pass.   

    GMS will continue updating you on all the details to come regarding this new mandate. Be sure to stay in the know by subscribing to our email list.  

  • Workplace Culture Can Help You Attract And Retain Top Talent 

    Company culture, a once cliché term, is now at the forefront of every leader’s brain – as it should be. Pair the up-and-coming millennial generation that continues to shift the nation’s workforce with the hundreds of thousands of employees who have become accustomed to working at home over the last year and a half, and there you have it… The Great Resignation. 

    According to the U.S. Department of Labor, during the months of April, May, and June 2021, a total of 11.5 million workers quit their jobs. This voluntary workforce mass exodus has left businesses of all sizes and industries wondering how, if at all, they could combat such an occurrence.  

    As a business owner, you likely are already aware that a solid culture could be your best defense in the fight. But, what you may not have realized is culture isn’t the casual dress code Fridays and suction-cup basketball hoops on the wall that once deemed an organization as a good place to work. Now, culture is developed on the premise of a much different set of values, including work-life balance, inspiring leadership, and professional development – just to name a few.  

    Every company will develop a certain type of culture over time, but it is your job to control the values, beliefs, and attitudes you create. Keeping an eye on this can help boost productivity and decrease both turnover and negative behaviors. According to Balance Careers, your employees are more likely to enjoy their work and be more productive if you focus efforts on culture and making sure that your employees are happy while getting the job done. It’s not just about your current employees, though. If you’re looking to grow your business, consider how your culture may appear to candidates. 56% of workers ranked a strong workplace culture as more important than salary, with more than three-in-four workers saying they’d consider a company’s culture before applying for a job there.  

    Five Aspects That Drive Your Culture 

    There are five aspects that can impact your company culture: opportunity, success, appreciation, and well-being, and purpose. All five aspects are arguably subjective, but equally important.  

    • Opportunity: Opportunity can look different for every role and every employee. Is it the opportunity to learn a new skill or the opportunity to one day have a higher title? If opportunity breeds success, why limit what opportunities are available to your employees? 
    • Success: Both personal success and the company’s success should be key drivers for your culture, but at what cost? What does success look like to your leadership team and how will you communicate it along the way? How will you celebrate successes, and, on the contrary, how will you develop and coach employees when they fall short of it? 
    • Appreciation: Heavily-important to millennials, your employees seek recognition. The age-old saying, “A person who feels appreciated will always do more than expected,” still holds true. Is your management team expressing appreciation and recognizing achievements? Taking it one step further, are you recognizing your employee in a way that resonates with that particular person? Finally, recognize that communication is crucial in expressing your appreciation, don’t assume your employees know that you appreciate them. 
    • Well-being: One of the most talked about topics as the country begins to put an emphasis on mental health, what does your culture offer for employees’ well-being? Sure, not every organization can offer mental health days or an office puppy to boost morale. But, are your leaders trained to recognize burnout? Do your managers have a zero-tolerance policy for gossip? Are you working to create healthy relationships or are you giving never-ending to-do lists and nonstop deadlines? 
    • Purpose: The infamous “why.” What’s your company’s why? What is your employee’s why? Does your job candidate have a why? (Spoiler alert: if they don’t, they likely will lose motivation) Do those align? Are the values made clear?  

    Taking the necessary footsteps above to define your culture could save you from losing your top talent. Still, it can be overwhelming to even get started. As your trusted HR partner, we know what tactics to leverage in helping build a culture that is unique to your organization. Contact us today to discuss your options.  

  • New For 2022: 401(k) Contribution Limit Rises   

    The IRS announced the 2022 cost-of-living adjustments (COLAs) for employer-sponsored retirement plans. Both employee and employer limits will increase due to the continued rise of inflation. Employees under the age of 50 will now be able to max out their contributions at $20,500. This is a $1,000 increase from the cap in the years 2020 and 2021. Employees aged 50 and older will continue to be able to contribute an extra $6,500 in catch-up contributions, which has been unchanged for the last two years. 

    In addition, the employer-plus-employee contribution limit will increase to $61,000 in 2022, up by $3,000 from 2021. This is particularly beneficial for employers that make an annual profit-sharing contribution. 

    When dealing with the annual limit as a contribution goal, not all employees will be able to fund the maximum amount. However, if employees consider raising their contribution rate by even 1% each year, they will see a dramatic impact at retirement. “If your employer offers a matching contribution, it’s important to try and contribute at least that percentage as a minimum,” said Tom Smith, Manager – Executive & Retirement Benefits for GMS. “Also, striving to increase your personal deferrals each year in order to eventually reach those annual contribution limits will help increase your odds for a comfortable retirement.” 

    Employees that do want to max out their contributions should check in with their employer about reaching the annual limit prior to year-end. If this occurs, employees may lose out on employer matching contributions tied to each paycheck. Certain plans allow for a year-end “true-up” contribution, so it’s best to know your company’s 401(k) plan provisions to ensure you are receiving the maximum employer match.  

    It can be challenging for both the employer and the employee to comply with these limits. Employers must ensure that their payroll systems do not accept contributions once the limit is reached. Employees also must remember that the annual limit applies to the total contributions between all 401(k) plans. Since the contribution limit is an aggregate total, employees who work at multiple jobs over the course of a year and contribute to multiple different 401(k) plans will need to self-police how much they are contributing to each plan, so that they do not contribute more than the IRS limit. 

    How GMS can help:   

    Partnering with a CPEO (Certified Professional Employer Organization) like GMS can allow you to offer 401(k) and profit-sharing plans for your employees. It’s no secret offering retirement plans is important to recruit and retain quality employees, but they do come with a lot of complexity and risk. GMS takes on the role of the fiduciary to ensure employers maintain compliance, which means that business owners do not have to waste time trying to make sense of their legal responsibilities. When you work with GMS, we will take care of the administrative tasks, auditing, and plan management.  

    Interested in cutting costs and reducing stress? Contact GMS today to get your customizable 401(k) or profit-sharing retirement plan started. 

  • Three HR Tech Trends To Implement   

    As the HR technology landscape continues to gain momentum, companies across the country are utilizing the surge of new solutions to more efficiently manage their employees. From learning management systems to applicant tracking – all these exciting offerings make it easier for owners to streamline their employee experience, and, in turn, allow them to focus on the daily tasks of running your business.  

    Check out the top three trends according to our HR experts:

    Trend #1: Applicant Tracking Systems 

    An applicant tracking system (ATS) will transform your hiring process in no time. Here, your company can show what jobs you have open, along with seeing which ones candidates are most interested in. This platform is intuitive enough to show how long it took to get them in the door and accept the job – which is crucial, as the workforce continues to tighten. Moreover, an ATS offers customizable and configurable features, including pre-hire assessments and sourcing of passive candidates. Plus, with integrations on career sites, job boards, and social media, an ATS can get your posting out quickly and effectively.  

    Lastly, consider how an ATS can help you thin out your candidate pool by setting minimum requirements, such as years of experience or education. With the time saved and quality hires gained, the return on investment of an ATS is more apparent than ever.  

    Trend #2: Performance Management Systems 

    A performance management system is vital to developing and improving performance at an organizational, departmental, and individual level. Whether it’s creating notes for a one-on-one meeting, setting objectives and goals, or guiding evaluations, implementing a performance management system allows for transparency and accountability on all accounts.  

    The most important aspect of using a performance management system is how your company is closing the loop with the information learned. Management must rely back on the information gleaned to make informed decisions on compensation such as increases or bonuses, as well as career trajectory and company goals. Just about anything related to human capital management can and should come from your performance management system.  

    The return on investment (ROI) of your performance management system can be calculated through a variety of means – consider tracking the increase of workforce productivity, the cost of reducing your attrition, or simply the time saved. Effective performance management drives business benefits.  

    Trend #3: Learning Management Systems  

    A learning management system (LMS) provides the framework for an organization’s learning and development. The right LMS can help an organization create, manage, share, and track learning programs. Investing in the educational development of your staff helps keep them engaged, which, in turn, helps you retain quality talent – knowing that every time a business replaces a salaried employee it costs them six to nine months’ salary. 

    As a plethora of companies make the leap over to paperless, an LMS can lend a hand in those efforts. Paper can be a big hassle when you need to edit information in a small amount of time. eLearning helps your company’s green initiatives by not reprinting material every time a small change is made. Moreover, quizzes and other learning activities no longer require being printed either. However, there are print options still along the way, such as printing a certificate of completion when an employee completes a training. Perhaps your company isn’t quite paperless but is still working remotely, an LMS provides the classroom experience without actually needing the classroom. 

    According to an article from Cornerstone, training is best understood when it is customized to an employee. Personalized information is one of the most important aspects to consider when wanting everyone to fully understand the information they are being taught. Each department has job-specific knowledge they need their employees to learn, which LMS makes very appealing.  

    As you may know, we are on the verge of what some experts deem “the great employee resignation.” The time is now to show your employees that you are invested in their education and future. By offering continued education through an LMS, you can offer your employees tailored content to help develop them professionally.  

    Our Message: 

    When deciding whether you want to add HR Platforms to your business, it is important to fully understand all the aspects included. We recommend doing your research on which one matches your company’s budget and functions, as this information above was just an overview of a few great ones we recommend. To learn more about how we can help you grow your business and to take advantage of our HR technology, contact us here.  

  • The Employee Retention Tax Credit (ERTC) is set to expire at the end of 2021, but that doesn’t mean that businesses are out of time to take advantage of the credit. The exact details of the ERTC have changed since it was created by the Coronavirus Aid, Relief and Economic Security (CARES) Act in March of 2020. After multiple extensions, it’s likely that the ERTC won’t be around after Dec. 31, 2021.

    Fortunately for businesses, the most recent updates have made it easier to benefit from the ERTC. Between the Consolidated Appropriations Act and American Rescue Plan, the IRS has loosened its criteria for which businesses qualify and increased how much businesses affected by COVID-19 can claim. Here’s a breakdown of what has changed for the ERTC and how businesses can claim tax credit before it’s too late.

    Key Updates To The ERTC

    Relaxed standards for eligible businesses

    Businesses of all sizes can qualify for the ERTC. There are a variety of factors that the IRS uses to determine if a private-sector business or tax-exempt organization is eligible for the tax credit. These factors have changed over time since the ERTC was introduced in 2020. As of now, the following criteria are used for eligibility:

    • A full or partial suspension of trade or business operations during 2020 or 2021 due to governmental orders stemming from COVID-19.
    • A decline in gross receipts of more than 20% (previously 50%) during a calendar quarter in 2020 or 2021 when compared to the same quarter from the 2019 year.
    • New businesses – called “recovery startup” businesses – created after Feb. 15, 2020, and have average annual gross receipts that are $1 million or less.

    Originally, the CARES act excluded Paycheck Protection Program (PPP) loan recipients from qualifying for the ERTC. That exclusion has changed and businesses that received PPP loans can also qualify for the ERTC retroactive to March 12, 2020.

    Changes to how much businesses can claim

    The credit is based on an eligible business’ “qualified wages.” In the past, businesses with 100 or more employees would only count wages paid while the employer could not provide services due to COVID-19. The CAA changed it so that any eligible business with fewer than 500 employees can consider all employee wages as qualified for the credit whether they are subject to a shutdown order or open for business. In addition, businesses can consider any employer-paid health benefits as part of employees’ qualified wages.

    The exact amount of the credit has also changed since the ERTC was first introduced. The credit was increased from 50% of qualified wages paid during the calendar quarter to 70% thanks to the Taxpayer Certainty and Disaster Tax Relief Act of 2020. That rate was kept when the ERTC was extended through Dec. 31, 2021.

    Eligible employers can apply that 70% to their qualified wages up to a limit of $10,000 per quarter. As a result, employers can receive a maximum quarterly credit of up to $7,000 per employee, or $28,000 combined for all four quarters. However, businesses that received PPP loans will still receive a maximum credit of only $5,000 per employee.

    New exceptions for “severely distressed” employers

    Another change that the American Rescue Plan Act made to the ERTC involved loosening up some of the restrictions placed on what the IRS considered “severely financially distressed employers.” The Act allows employers to claim tax credit for all employee wages up to the limit as long as they can demonstrate reductions in gross receipts of at least 90% compared to the same calendar quarter in 2019.

    How To Claim The ERTC For Your Business

    Any eligible employers must report their total qualified wages and the related health insurance costs on their quarterly employment tax returns to claim credit. For most employers, this will require filling out Form 941 and including relevant information for each quarter. The final date to claim the ERTC is now Dec. 31, 2021.

    Businesses that may have previously missed opportunities to claim the ERTC are also in luck. Eligible businesses can retroactively claim an ERTC refund on qualified wages paid for past quarters within the ERTC timeline. Employers would need to file Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, in order to make up for that lost opportunity.

    While the deadline is Dec. 31, 2021, it’s best to collect all the required documentation and submit it to the IRS earlier than that date. The quicker a business files this information, the sooner it will receive ERTC funds, as turnaround times are roughly 30 to 60 days. This need for prompt filing is especially true for Form 941-X. The estimated turnaround time for retroactive claims is roughly 90 to 120 days, and there could be significant delays as the IRS addresses its current backlog of 941-X returns.

    Prepare Your Business For The ERTC And More

    While it’s easier to qualify for the ERTC in 2021 than in the past, it’s still not a simple process. Employers still need to parse through a lot of payroll data to even determine if they’re eligible – and then they’ll have to collect and complete even more documentation to claim those important funds.

    If that sounds like a lot of complicated, tedious work, it is. That’s why so many businesses partner with GMS to manage their payroll administration and stay on top of ongoing legislative changes. While our experts take on time-consuming tasks in payroll processing and tax management, you can focus on your own business and make the most out of opportunities like the ERTC.

    Ready to simplify your business? Contact GMS now about how we can help you stay on top of tax credits and more.

  • The COVID-19 pandemic has caused employers to adjust day-to-day operations time and time again. That trend continues after President Joe Biden announced a vaccination mandate on Sept. 9, 2021.

    Biden’s executive order is designed to address the ongoing pandemic through new policies that are designed to slow the spread of COVID-19 and the Delta variant. Many of these policies will directly impact employers of all sizes and require them to prepare accordingly now that the Occupational Safety and Health Administration (OSHA) issued an emergency temporary standard (ETS) November 4th, 2021.

    So what does the vaccine mandate mean for businesses across the country? Let’s break down what employers need to know about the new vaccine mandate and how it impacts their day-to-day operations.

    What Employers Are Covered By The New Vaccine Mandate?

    The vaccine mandate does not apply to every employee in the United States. Instead, there are three main groups that are impacted by the mandate:

    • All federal staff and employees of government contractors and subcontractors.
    • Medicare and Medicaid workers and any other care providers that receive Medicare or Medicaid reimbursement.
    • Private-sector employers with more than 100 employees.

    For the majority of business owners, the last group is the relevant of the three and covers approximately 84 million employees. The executive order mandates that any on-site employees of businesses with more than 100 employees must meet one of two obligations:

    • Provide proof of vaccination.
    • Undergo weekly tests for COVID-19 if unvaccinated.

    When Does The Vaccine Mandate Go Into Effect?

    The ETS sets a specific timeline for the businesses covered by the mandate. Any private-sector employer with more than 100 employees must choose between full vaccination or weekly testing by December 5th, 2021, which is 30 days following the ETS’ publication in the Federal Register.

    These businesses must then implement that rule by January 4th, 2022, which means that employees must receive the necessary shots to be fully vaccinated by that date. Any unvaccinated will be required to provide verified negative tests for their employer at least once a week. In addition, employers have a responsibility to ensure that unvaccinated employees wear a face mask while on site.

    How Does The Vaccine Mandate Impact Employers With Fewer Than 100 Employees?

    As it stands, the mandate does not apply to any businesses with fewer than 100 employees. These organizations can still opt to require vaccinations or forego any type of mandate. OSHA also announced that it will use a company’s total headcount for the mandate. As such, the number of employees at different worksites will be added together to see whether an organization meets the 100-employee threshold.

    How Does The Mandate Impact Part-Time, Remote, Or Other Types Of Employees?

    The vaccine mandate applies to any employees who work in the office, facility, or any other type of jobsite where they could interact with co-workers. That distinction means that any employees who are completely remote wouldn’t be subject to the vaccine mandate. Employers do have the option to extend the vaccination requirement to remote employees as well if they so choose.

    While the mandate impacts the vaccination or testing status of on-site employees, employers should still individually count every worker toward the threshold. That means that organizations should include the following people toward their total base of employees:

    • Remote employees
    • Full-time employees
    • Part-time employees
    • Temporary workers

    The mandate does provide a couple of exemptions that do not count toward the threshold. As it stands, any independent contractors and “leased” employees are not counted toward the mandate.

    How Should Employers Handle Employees With Medical, Religious, And Other Exemptions?

    Simply put, navigating vaccination exemptions and accommodations isn’t always an easy task. However, there are some steps that employers should take to handle employees that require vaccine exemption.

    To start, employers can ask for objective documentation that supports any medical or disability exemptions. Handling religious exemptions is a more complicated process. According to the Equal Employment Opportunity Commission (EEOC), employers should assume that any requests for religious accommodation are based on sincere religious beliefs.

    The caveat to that assumption is that employers may request additional information from an employee if they have any objective evidence that questions or disproves the sincerity of any beliefs. Employers may also ask for more detail if an employee’s basis for exemption is simply that their religion doesn’t permit vaccination.

    Do Employers Need To Pay For COVID-19 Testing?

    In general, the ETS does not require employers to provide or pay for tests. An exception to this standard is whether the employer in question is subject to any other applicable laws or collective bargaining agreements. However, employers must provide paid-time for employees to get vaccinated. Employees should also be granted sick leave if they need to recover from any side effects that prevent them from working.

    How Should Employers Record Vaccination Information and Handle Employee Vaccination Status?

    There are a variety of ways that employers can capture and verify vaccine status. These can include a letter from a healthcare provider, copies of vaccine cards, and other forms of proof.

    It’s essential that employers be discreet about any employee vaccination information. Vaccination status is confidential medical information and should not be shared with any co-workers, supervisors, or other individuals who don’t need to know. As such, it’s best practice to securely store vaccination records separate from other employee information and limit access to only those on a need-to-know basis.

    What Steps Can Employers Take To Prepare For Vaccine Mandates?

    While the vaccine mandate only applies to private businesses with more than 100 employees, organizations of all sizes can prepare their businesses for the new requirements. This preparation will help employers be ready for the mandate, whether they must follow the vaccine mandate or choose to enforce it.

    • Survey employees for vaccination status – Identify which employees are vaccinated, which ones will require testing, and which will require other accommodations and planning.
    • Research testing options – Plan ahead to determine the best testing approach for your business, which can include considerations for onsite or nearby testing locations and which tests comply with the ETS.
    • Create a written policy – Document your employees’ requirements to follow the vaccine mandate, including procedural requirements, employees’ options, and the consequences for noncompliance.
    • Communicate with employees – Share information about the vaccine mandate and your business’ compliance plan as early as possible. Early action will not only help build trust with employees, but also provide both parties with time to respond to employee feedback and plan for any employees who choose to depart due to the mandate.

    Another step that businesses can take is to not face the vaccine mandate and other legislation alone. GMS partners with businesses to take on time-consuming administrative burdens and guide them through difficult decisions, including how to handle the White House’s vaccine mandate.

    Ready to navigate through increased compliance requirements and other critical decisions that will affect the future of your business? Contact GMS now to talk with our experts about how we can make your business simpler, safer, and stronger.

  • Washington has officially announced that under government ruling, starting on January 4th, all companies with 100 or more employees will need to be vaccinated or produce a verified negative COVID test weekly.  If one should not fully comply, there will be a nearly $14,000 fine per violation – up to $136,532 for a willful violation of rules. Unvaccinated employees must also wear masks. This new ruling will affect more than 84 million workers at medium and large companies.  

    Stricter rules will apply to 17 million people who work in nursing homes, hospitals, and other facilities that receive Medicare and Medicaid. They all must be vaccinated and will have no option to be tested.  

    Along with vaccine mandates and testing, OSHA requires that businesses provide paid time off for employees to get vaccines and sick leave to those who have gotten sick from the virus, which will go into effect on December 5th.  

    OSHA also states that because vaccines are free of cost, the companies do not need to pay for the tests for employees who do not wish to receive the vaccine.  

    Administration officials say efforts to get people vaccinated are paying off with about 70% of the nation’s adults now fully vaccinated. Although some companies fear that vaccine-hesitant people might quit which leaves an already-struggling small workforce even thinner.  

    This situation remains fluid and it is expected more changes and announcements are forthcoming. 

    Partnering with GMS can help business owners navigate legislative updates during these unprecedented times. To learn more about our services, contact us today. 

  • The Unanticipated Telecommuting Tax  

    Throughout the progression of COVID-19, over half of full-time employees were encouraged to work from home. As a result, some major corporations have permanently implemented the option to telecommute. The drastic change brings along an unexpected tax consequence.  

    Within most states, there is state income tax withholding which is required by the state where employees perform. The state can tax employees’ earnings if they work or live within the state. When it comes to neighboring states, commuters often have reciprocity agreements. These agreements allow withholding to be required within the employee’s home state. However, the tax or withholding is not always enforced to the work state.  

    When an employee works in a different state from their employer, it often creates another complication – Nexus.  Although varying by state, it holds the potential to trigger state income, sales tax, and corporate taxes for the employer. Employees will not be the only ones who are impacted. With an increasing number of employees teleworking from various locations, how to manage where they are to pay income tax has become vastly complicated.   

    Telecommuting is proposed to be the new norm, even after the end of the pandemic. If this occurs, employers must be made aware of the potential tax impacts and how to properly manage their teleworkers.  

    How GMS Can Help:  

    Working with a PEO like GMS will allow you to stay up to date with all the changing regulations. Along with ensuring that as an employer you are covered throughout the complete employee life cycle. Allowing business owners to have additional access to counsel for any questions that may arise.   

    Interested in learning more about all GMS has to offer? Contact us today!