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  • Utilizing A Learning Management System For Your Small Business 

    Whether it’s learning your business model, or transforming your company policies and procedures into a more robust training, a Learning Management Systems (LMS) can help by ensuring your employees receive a uniform experience across the board. E-learning offers many competitive advantages that traditional training can’t always deliver – such as learning at one’s own pace, greater program variety, and of course, progress tracking.  

    Keeping your courses up-to-date has never been so seamless. You can edit the information in one area online and be sure that your employees see the changes in no time. An important fact that eLearning Industry points out is that an LMS provides a more secure platform than hard drives or paper, which helps reduce the risk of losing important data. It is recommended to use this for new hire, quarterly, and yearly training. You can easily track how your team is doing on this platform and see what lessons are difficult for them.  

    A plethora of companies are switching over to paperless for varied reasons that benefit companies. Regarding the LMS platform, 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 successfully completes a training.  

    According to this Cornerstone article, 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.  

    According to Mercer Consulting’s trend report, employees want to feel a sense of purpose at work, which understanding your business model can help with. It’s no surprise that many people leave a company because they don’t have an opportunity to learn or grow. Implementing an LMS encourages your employees to continuously grow their skillset while also helping them to understand the business better.  

    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.  

  • Social Security Benefits Increase For 2022 

    Just this month, the Social Security Administration announced that the 2022 Social Security wage base will increase $4,200 from $142,800 to $147,000. This cost-of-living adjustment (COLA) equates to a 5.9 percent increase to monthly checks in 2022. The adjustment will be considered the largest boost in decades. The Washington Post stated, “The adjustment will be made for 64 million Social Security beneficiaries as well as eight million Supplemental Security Income recipients. Some Americans receive both benefits.” The adjustment is calculated based on the Labor Department’s measure of inflation faced by blue-collar workers.  

    Because of the wage base increase, higher-earning individuals will then be taxed a larger amount. “The maximum Social Security tax per worker will be $18,228 or a maximum $9,114 withheld from a highly paid employee’s 2022 paycheck.” Social Security tax is one of two taxes all employers are required to withhold under the Federal Insurance Contributions Act (FICA), with the other being Medicare Tax. Because FICA tax rates are statutorily set, they can only be changed through new tax law.  

    Social Security is the biggest program funded by payroll taxes paid by both workers and employers, along with being the largest source of retirement income for most older Americans. Some think that this could be tied with increases in healthcare and housing costs. The price of prescription drugs has also gone up exponentially.  

    Ensuring that you have the most up-to-date legislation for your payroll can be a heavy burden that requires significant time and effort. As your trusted payroll partner, GMS can automate the process and help ensure you are compliant with all federal, state, and local regulations.  

     Visit our website to learn more, or contact us here: https://www.groupmgmt.com/contact/ 

  • Why Certified Professional Employer Organizations Are Critical To Franchises

    Franchising has proven to be an extraordinarily successful business model for hundreds of thousands across the country, as it delicately blends entrepreneurship with tailored guidance. For most successful franchisees, their strength lies in the structure of their business operations. So, it makes perfect sense that adding a Certified Professional Employer Organization (CPEO) further increases a franchise’s operational efficiencies – especially considering that effective employee management is ranked #2 in the three biggest challenges that franchises face.

    Franchise owners are exceptionally fond of the CPEO model because they maintain control of all organizational decision-making, while HR burdens and liabilities are shifted to the CPEO.

    CPEOs manage a plethora of duties within the employment process – from benefits to HR services, and even payroll and tax, thus providing an extra layer of safety by ensuring regulatory compliance. Having undergone rigorous background, financial, and reporting requirements set by the IRS, fewer than 7 percent of PEOs in the U.S. are currently certified.

    Partnering with a CPEO offers your franchise:

    Benefits: Benefits administration can be tolling, especially when you consider onboarding, claims, and most importantly… rates. Because the CPEO model aggregates the employees of its clients, they then having the buying power of large corporations. In turn, your franchise and its employees enjoy competitive rates and solid coverage.

    HR Services: Whether it’s employee handbooks, onboarding, drug testing services, or employment verification – amongst other things, your CPEO helps you simplify your HR plans. Now more than ever, as the country faces a workforce shortage, finetuning your employee experience is vital for your recruiting and retention.

    Payroll and Tax: CPEOs assume the responsibility for federal tax liability and penalties and are required to post an annual bond of up to $1 million guaranteeing payment of its federal employment tax liabilities. CPEOs ensure financial protections and tax benefits that non-certified PEOs do not necessarily have. This means paying your employees, record keeping + management reports, PTO accruals, and more, are no longer on your plate.

    Compliance: The co-employment relationship allows your franchise to substantially mitigate the risk associated with being an employer. A CPEO will provide guidance and support on new hire reporting, Employment Practices Liability Insurance (EPLI), unemployment and workers’ compensation insurance filings.

    A good CPEO can ease the mind of franchise owners while helping to reduce both their cost and liability. Contact us today to see how your franchise could benefit from with a CPEO.

  • New Jersey Secure Choice Savings Program   

    State-mandated retirement plans are increasingly popping up across the country. Currently, California, Illinois, Massachusetts, Oregon, and Washington already have retirement legislation active. Other states, such as Colorado, New Jersey, New Mexico, Seattle, Virginia, and Vermont have similar legislation passed. While their requirements are not yet active, implementation is scheduled – some beginning at the end of this year, and others not taking place until 2023. Finally, the states of Connecticut, Maryland, Maine, and New York also have legislation passed – but no clear implementation dates have been outlined.  

    Why Require A State-Ran Retirement Plan? 

    According to the National Institute of Retirement Security, 57 percent of working-age households have no retirement assets. Moreover, of those that do, only half an adequately prepared for a comfortable retirement – thus relying on Social Security for half of their retirement income. It’s no surprise that the looming retirement savings crisis exists for these reasons. 

    How Do These Plans Work? 

    There is a common misconception that plans must be offered as a 401(k). However, the majority of these plans will serve as Roth IRAs, which have a few key differences with a 401(k): 

    • 401(k)s have a higher annual contribution limit vs Roth IRAs 
    • Roth IRAs are after-tax, whereas 401(k)s offer pre-tax & after-tax contribution options 
    • Employers cannot match Roth IRA contributions, but can match 401(k) contributions 

    California, Illinois, New York, and Oregon are offering these Roth IRAs.  

    The New Jersey Secure Choice Program:  

    NJ Secure Choice is a state-sponsored retirement plan, aimed to close the retirement savings gap. The Program allows employees to contribute a portion of their pretax earnings to an individual retirement account (IRA) via payroll deductions. They are automatically enrolled at a 3% contribution rate, unless the employee changes said rate or opts out. Kulzer & DiPadvoa P.A. explained, “The program gives workers in New Jersey the option to invest the amounts withheld by their employers and remitted to New Jersey in a state-administrated Individual Retirement Account”. Contributions are capped at $6,000 annually, as required by IRS guidelines.  

    This Program applies to for-profit and non-profit employers in the public sector who have 25 or more employees and have been in business for more than two years. While businesses with fewer than 25 employees are not required to participate, they may choose to do so.  

    As it currently stands, this law is set to begin in March 2022, after a brief extension was granted due to COVID-19. Roll out is expected to take nine months – employers thereafter will have a grace period of 12 months if needed. This program imposes penalties on non-complying employees with a warning of up to $500 per employee.  

    Three Subjects Employers Must Follow Are:  

    1. Notice Requirement: For the first six months the board will have a process in which employers can register for the program and employers must have a packet to give to their employees that was prepared by the board.  
    2. Payroll Processes: Employers must have a retirement savings arrangement more than nine months after the board opens for enrollment. Any employees must be opted in unless they have opted out of the program. 
    3. Enrollment Of Employees: No later than three months following the date of hire, employers must enroll an employee hired more than 6 months after the Board opens the Program for enrollment.  

    GMS believes that employees should have options to receive a great retirement plan no matter how big or small your wage is. Our office in Cherry Hill, New Jersey is ready to help small businesses receive the best plan catered to their needs. We know that figuring out which plan is best for you can be stressful but offering a retirement plan is important when recruiting and retaining quality employees.  

    To learn more about our savings plans, contact us today.  

     

  • As you may expect, conflict in the workplace can be a serious issue for a small business. Unresolved conflicts among workers can create a difficult working environment both for those involved and others witnessing the dispute. These issues also have a direct impact on the financial well-being of your business.

    According to a report published by the University of New Mexico, the collective cost of unresolved conflicts can be as high as $300 billion annually for businesses across the country. Other analyses peg the figure at approximately $359 billion in lost revenue.

    Without a way to resolve contentious relationships, you’re inadvertently increasing the risk of developing a dysfunctional workforce that hurts your business in the long run. It’s time to break down to root causes of employee conflicts and how your business can resolve these problems.

    What Causes Workplace Conflicts?

    Honestly, conflict in the workplace can originate from any number of sources. It could be something as simple as a department manager being rude to a new hire or something like an employee who feels like they’re not treated fairly by their colleagues. At worst, the root of the conflict can be something like blatant harassment or inappropriate, lewd behavior.

    Hot-button topics are also notorious for creating unnecessary conflicts at work. The crux of the problem could be anything from political opinions to which sports franchise has more clout. The trick is to have a strategic conflict resolution plan to solve the problem.

    Five Steps To Resolving Workplace Conflicts

    It’s important to have a plan that helps you handle conflict and help everyone work towards a common goal – growing the company and furthering its success. Use the following steps to address conflicts before it’s too late.

    1. Meet with the conflicting parties

    Defining the root cause of the conflict is the first, and arguably most difficult, step. It’s critical to discover how the issue got to this point in the first place. Meeting with the conflicting parties can help you get both sides of the story and identify if the problem is easy to address or will require a more detailed response.

    These meetings should happen in a private, neutral setting. Both parties need to have their voices heard so that each of them acknowledges the other’s perspective. You’ll also want to play the role of an active listener. Make sure both parties know you’re paying attention and obtain as much information as possible to help them come to a reasonable solution.

    2. Investigate the conflict following the meeting

    Following the meeting, it’s always wise to investigate the integrity and the validity of each party’s explanation of how the conflict started in the first place. Often, you’ll discover that the root of the problem is nothing more than a usual misunderstanding among two dedicated, passionate, and career-minded professionals.

    3. Determine ways to truly resolve the conflict and meet a common goal for all parties

    The next step involves a fair amount of creativity on your part. You have to think outside of the box and brainstorm ways to manage and ultimately resolve the issue once and for all.

    This process may require additional communication, investigation, and planning. Don’t be afraid to sit down with both individuals again to openly discuss ways that manage and resolve the conflict. Use this brainstorming session to come up with ideas to deescalate the situation and come to a conclusion that benefits everyone.

    4. Develop a conclusion

    Once you gather all the information, you can finally make a determination on the extent of the issue, how the conflict began, how it escalated, and what everyone can do today to finally put the negativity to rest.

    The idea is to lay out a clear plan of action to find common ground and focus on the task at hand: working towards the same goal and furthering the company’s success as an efficient team of skilled professionals. Once this plan is in place, communicate it with the individuals so that they can put an end to the ordeal.

    5. Decide on preventative strategies for the future

    The last step is to ensure that this particular conflict doesn’t happen again. Evaluate the situation to see if this conflict can rear its ugly head again. If so, create an action plan to not only avoid conflicts, but also quickly address them in the future if they do occur.

    Six Ways Small Businesses Can Minimize Conflict

    While some conflict is inevitable, there are ways to minimize the likelihood of workplace disputes. There are a variety of strategies small business can utilize to protect themselves and their employees from these issues.

    Establish written rules and clearly defined company policies

    A good policy will make the conflict resolution process smoother when issues arise. Use your employee handbook to lay out clear guidelines about employee conduct and expectations for people within your company. These ground rules will help set the tone for what is and isn’t acceptable and clearly describe the consequences and next steps for misbehavior.

    Hire the right people

    The right employees will be less likely to create conflict. It’s important to not only hire people with the right skills, but also a good temperament for your business. You can also conduct background checks to try and identify any red flags that may cause problems in the future. Spend some time to properly vet each prospective employee to minimize the chances of conflict in the future.

    Provide management training

    Another way to minimize the impacts of conflict is better management training. You can’t be everywhere at once throughout the day, so you entrust your management team to be your eyes and ears. Training managers and other appropriate personnel on established policies and identifying brewing conflicts can help your business quell minor issues before they grow into severe problems.

    Create a fair grievance process

    Poor communication is a problem. A fair grievance process is an effective problem-solving tool that allows employees to feel heard and managers to identify the source of conflict before it becomes a bigger issue.

    No matter what policies you put in place, the process needs to be transparent and equitable. The same standards should apply to management and workers. This process will keep everyone accountable to each other and quickly soothe exasperated employees.

    Feedback

    Feedback is what brings the resolution process back to the beginning. You may spend a tremendous amount of time making written procedures and policies – and for good reason – but there’s still plenty to overlook.

    Give employees a way to provide feedback so that they share ideas on how to make the workplace a better place, whether that’s an anonymous tip line or a company email address. This feedback loop can help you fine-tune your policies to your workforce and, hopefully, put petty fights and arguments to rest.

    Protect Your Business From Conflict

    Workplace tension is a recipe for lost productivity and heated arguments. However, it’s not always easy to put conflict resolution strategies into place by yourself. GMS has the human resource experts to provide you with the tools and support you need to manage employee relationships.

    Ready to make your business simpler, safer, and stronger? Contact GMS today about how we can support your business through dedicated service and support.

  • When you run a small business, offering group health insurance plays a critical part in attracting and retaining top talent. According to a study by MetLife, 81% of employees named health insurance as a “must-have” benefit, while only 3% said that it wasn’t needed. While other factors impact job decisions, it’s no secret that healthcare coverage plays a key role in making your business a more desirable place to work.

    The advantages of offering group health insurance are clear, but there is a drawback for businesses – it’s not cheap. Group health coverage can cost a small business thousands of dollars per employee, and those annual costs can add up depending on the size of your workforce. It’s also common for premiums to rise year over year.

    Want to know why premiums are getting more and more expensive? We’ll break down what impacts your premiums and why rising costs are a common trend.

    What Impacts Your Group Health Premiums?

    The cost of a group health insurance premium is driven by several different factors. Insurance companies use these different considerations to raise or lower your group’s rates. The biggest factors that will dictate how much you and your employees pay include the following categories.

    Group size and overall wellness

    The first thing an insurer considers when calculating your company’s premium is the size of the group. Larger groups tend to enjoy lower costs because other factors can be spread across a greater number of individuals, whereas small groups won’t enjoy the same economy of scale.

    In addition to size, insurers also evaluate the general health and wellness of a group. A group that presents a higher risk of costly claims is likely to pay higher insurance rates. This reality is simply because the insurer estimates how much they can anticipate in paying out for claims in any given year, which is why your premiums may be higher.

    Age of the group

    The unfortunate truth is that as an individual ages, medical issues tend to be more common. Insurers will typically use the average age of your group members to calculate your premium. If your group skews older, your premiums will likely be higher than average.

    Group member occupations

    Some occupations inherently carry more health risks than others. The level of risk based on certain industries or jobs directly impacts the cost of group insurance premiums. For example, a staff comprised mostly of accountants will present a lower risk than a group of construction workers. As such, the construction company is likely to have a higher number of claims and more expensive premiums in this scenario.

    History of claims

    Your past also plays a direct part in premium calculations. The total cost of past claims can negatively or positively impact your rates. If your group has several members undergo costly medical procedures, your premiums may increase the following year. This adjustment is the result of an insurer using current data to estimate how much your group should pay for its coverage.

    The Reasons For The Rising Costs Of Healthcare

    In recent years, the cost of offering health insurance seems to be on a never-ending upward trend. That perception isn’t an illusion – rising healthcare premiums are a real trend instigated by a variety of factors.

    Increase in medical expenses

    Demand for medical services has seen a big increase due to government programs such as Medicare and Medicaid. Many individuals who lacked coverage are now on these programs. This rise in demand and hospital visits effectively causes a similar rise in medical care costs and premiums. Prescription drug spending is also on the rise, which adds yet another layer to why the costs of health insurance keep increasing.

    Population growth

    Sometimes rising healthcare costs is simply a matter of having more patients. Our population continues to grow, which simply leads to greater national health expenditures. As a result, the overall population increase puts a greater strain on the healthcare system and leads to higher operational costs that impact everyone’s premiums.

    Advancing age of population

    The population of the United States is not only increasing, but also aging. As of 2020, there were approximately 47 million people in the United States over the age of 65. As recently as the year 2000, this number was only 31 million. The aging of the population won’t slow down anytime soon, either. It’s projected that our population will include 65 million people over the age of 65 by 2040.

    With an aging population comes increased healthcare expenses. The older we get, the more medical issues we face. Therefore, a country whose senior citizen population is increasing is going to see hospitals that are hit hard on resources. In addition, the average group age can increase, leading to a more direct impact on your small business’ premiums.

    Increase in chronic illness

    As a nation, we are facing more chronic diseases now than ever before. The largest culprit is diabetes, followed by high blood pressure and high cholesterol. Simply put, the growth of chronic illness in the country leads to long-term care and greater costs for constant coverage to treat these conditions.

    How Can a PEO Help Lower Healthcare Premiums?

    A Professional Employer Organization (PEO) allows businesses to balance the benefits of group health coverage with the costs of health care spending. A PEO like GMS can help you offer top-tier coverage through more affordable insurance options. This cost-effective approach is made possible through both economy of scale and expert benefits administration.

    Increased buying power

    When you partner with a PEO, you aren’t buying group health insurance on your own. One tremendous benefit of a PEO is that it represents many organizations rather than just yours. This network of relationships means that a PEO can treat several companies as a single group while dealing with insurance companies. This grouping of organizations means that your small business can see the same types of benefits and cost savings that can typically only be obtained by larger corporations.

    More importantly, a PEO will split its portfolio of organizations into separate groups based on their own demographics. This means that your company will not be grouped in with every other company under the umbrella of your PEO, but instead will be treated based on your own group’s ratings. This means you will see the lowest cost possible, without cutting back on your actual coverage.

    Benefits administration and payroll

    A PEO can also help ease your administrative burden by enabling your healthcare admin and payroll to integrate with one another for a streamlined process. For example, payroll deductions will be set up automatically when new employees are onboarded and opt into health insurance. Paycheck deductions can be automated, including determining what should be pre-tax and post-tax.

    The process of employees enrolling in benefits or renewing during open enrollment can also be simplified by a PEO. Dedicated account managers and online systems make it simple to educate employees on their options and help them choose their coverage elections in the same online portal.

    In short, a PEO makes your benefits administration simpler and more cost-effective. It’s almost a full-time job to simply deal with the health benefits for your employees. That’s why our experts can help you invest in quality, affordable coverage and save you valuable time by handling time-consuming administrative tasks.

    Are you ready to streamline your administrative processes? Contact GMS now to talk with our experts about all your health insurance needs.

  • For the majority of small businesses, workers’ compensation insurance is simply an unavoidable cost. The exact requirements vary by state, but any company that needs coverage faces a simple scenario – carry workers’ comp insurance or face the consequences.

    While workers’ compensation coverage is a must for many small businesses, figuring out how much your business will owe is complicated. The exact rates can change every year and there are a variety of factors that impact how much workers’ compensation will cost your business. Let’s break down what impacts your workers’ compensation rates (and what you can do to save on these costs).

    How To Calculate Workers’ Comp Rates For Your Business

    The first step toward understanding workers’ compensation rates is to identify what factors directly impact premiums. There are three main elements that insurance companies use to calculate your workers’ compensation rate:

    • Workers’ compensation classification codes
    • Payroll
    • Experience modification number

    Workers’ compensation classification codes

    Your business’ line of work plays a major role in determining your workers’ compensation rates. Insurance companies use class codes assigned by the National Council on Compensation Insurance (NCCI) to adjust your rates. These three- or four-digit codes represent the overall risk level for different types of work.

    Insurance agents and underwriters use this information to adjust your overall costs based on your line of business. As you may expect, class codes that indicate greater risk will typically yield higher workers’ compensation insurance premiums. For example, an electrician will be more expensive to cover than an office worker.

    While many states use NCCI codes for their workers’ compensation rate calculations, some locations can complicate these calculations. There are several states that use their own code system, meaning that your rates could vary from the NCCI’s rules and regulations if your business is located in the following states:

    • California
    • Minnesota
    • New York
    • North Carolina
    • Massachusetts
    • Pennsylvania
    • New Jersey
    • Delaware
    • Indiana
    • Michigan

    To complicate matters even further, there are four monopolistic states: Ohio, Washington, Wyoming, and North Dakota. These states have special legislation in place where workers’ compensation coverage is only provided through a state program. For example, employers in Ohio must go through the Bureau of Workers’ Compensation (BWC) for workers’ compensation insurance by themselves or with a partner like a Professional Employer Organization. This difference means there is no open market for workers’ compensation insurance and the states may use separate class codes from the NCCI.

    Payroll

    While class codes impact your insurance rates based on risk factors, your payroll serves as the basis for your overall costs. Class code rates are assigned a dollar amount for every $100 of payroll, so your overall costs will naturally increase along with your total payroll.

    Of course, the rates will make a major difference in just how much you owe. Let’s imagine that you need workers’ compensation coverage for an employee making $50,000 a year. If that employee’s rate was $1.50 per $100, those costs would amount to $750 for that salary. Meanwhile, a higher rate of $15 per $100 will bump those premiums up to $7,500 for that one employee.

    Experience modification number

    Your business’ past also plays a part in your exact rates. Insurance companies factor in your overall workers’ compensation claims history and workplace safety into their calculations. In short, safer businesses with fewer, less severe claims will end up paying less than a similar business with more past incidents or infractions.

    The way insurance companies take your business’ experience and loss history into account is through your experience modification number, also known as a MOD. In general, agents and underwriters will look at your last three years of claims data, such as the type, severity, and frequency of claims to assess your overall risk level. The resulting MOD is then used as a multiplier in the following way.

    • Class code rate x (Annual payroll/$100) x MOD = Your business’ workers’ compensation premium

    If a business meets the expected losses for their type of work, they’d receive a MOD of 1.0 that won’t impact the calculation at all. Businesses with more losses than expected will have a MOD greater than 1.0, while businesses with a good claims history will have lower MODs. These MODs can drastically impact your overall costs. For example, a MOD of 0.8 will cut your premiums by 20%, while a MOD of 1.2 will increase them by 20%.

    Lower Your Workers’ Comp Costs With GMS

    Calculating your company’s workers’ compensation rates is a complex process, but that doesn’t mean lowering them has to be difficult for small business owners. GMS is a PEO that partners with businesses to save them time and money by taking on critical administrative burdens for them. That partnership includes utilizing cost containment and loss prevention strategies to help you lower your workers’ compensation rates.

    GMS partners with businesses of all sizes to minimize exposure through workplace safety and expert claims management. Our experts work directly with you to limit the potential for workplace injuries or illnesses through safety training and risk assessments. Meanwhile, we’ll be there to quickly and properly manage claims to control extra costs and protect your business.

    Ready to lower your workers’ comp premiums and focus on growing your business? Contact GMS today to workers’ compensation risk under control.

  • As a small business owner, it’s important to maintain a safe working environment. One of the ways that employers can create a safe workplace is to implement a random drug testing policy.

    Random drug and alcohol tests are a popular choice in workplaces because they discourage employees from coming to work while under the influence. Of course, there are plenty of rules and regulations that dictate some of the details around your drug testing policy, especially as more states legalize marijuana for medicinal use. Let’s break down what you should and shouldn’t do when designing and implementing a random drug testing policy for your business.

    Do: Notify And Educate Employees About Your Drug Testing Policy

    If you want to maintain a reasonable drug-free workplace and expect your employees to comply with mandatory drug testing, you need to notify them about the policy. Give your group of employees plenty of notice before the policy comes into effect and make sure to explain what their responsibilities are.

    There are multiple ways to advertise your drug policy, such as putting posters around the workplace and sending emails with educational resources. You’ll also want to hold a meeting to explain why you’re implementing a random drug testing policy and give your employees a chance to ask questions.

    Don’t: Skimp On Details

    A good drug testing policy is a thorough one. Your drug testing policy is there to protect you as well as your workforce, so make sure you have everything in writing. This means that your policy should cover several details, including:

    • Why you’re conducting drug tests.
    • What substances you’re testing for.
    • What testing method you’re using, and which company will be testing the samples.
    • The potential for false positives, if known.
    • How employees can appeal positive drugs tests and the details of your retesting policy.

    Do: Provide Proper Notice Of Upcoming Drug Tests

    While it’s tempting to think you can ask any employee to take a drug test at any time, your employees have the right to be given advance notice and to refuse a drug test if that notice has not been given. Most states require advance notice of drug tests, so it’s best to plan ahead and avoid potential problems.

    To protect both yourself and your employees, confirm in writing that the employee has been requested to take a drug test and make sure the correspondence is dated and logged. This process prevents employees from claiming they did not receive the request, or that they did not receive enough notice.

    Don’t: Ignore Local Laws

    Proper notice isn’t the only requirement that vary from state to state. You’ll have to tailor your policy to your location, as many states have their own laws regarding how to give notice to employees, what testing can be performed, and how employees can contest the results. The ACLU has an in-depth breakdown of each state’s requirements to help you keep your policy compliant.

    Do: Consult With An Attorney

    Before you talk to any of your employees about your drug testing policy, you’ll want to run it by a legal expert. Consult with an attorney to ensure that your policy complies with any relevant regulations. Between local, state, and federal laws, it’s best to leave some details to an expert. As such, attorney guidance can help you navigate tricky situations regarding marijuana laws, discrimination, and other factors that directly impact your drug testing policy.

    Don’t: Share Positive Tests Publicly

    Just because an employee tests positive doesn’t mean everyone should know. Your employees have a right to privacy and sharing that an employee has tested positive for drugs with their coworkers, other employers, or even their friends and family is illegal.

    Have internal policies in place to keep drug test results private between managers and their employees. These tests should also be stored securely to limit the chances that information and testing equipment are safe.

    Do: Clearly State The Consequences Of Violating Your Drug Policy

    It’s important that your employees know exactly what will happen if they fail a test. The exact consequences can vary depending on each policy. For example, you may choose to have a zero-tolerance attitude towards any substance if the employee works with heavy machinery or vehicles. However, a retail business may be more lenient with its disciplinary action.

    Your policy should also clearly state what happens following a positive drug test, and what rights the employee has to appeal the decision. Again, you should discuss with an attorney what’s considered reasonable based on the risk a non-sober employee presents.

    Don’t: Let Your Opinions Get In The Way

    Another key responsibility as a business owner is to be impartial during the drug testing process. You can’t let personal relationships with employees result in different consequences or processes, as this opens the door for discrimination cases. Every employee should be treated the same way and every meeting following a positive test should include an impartial third party.

    Do: Work with Experts to Build a Proper Drug Testing Policy

    Drug testing policies play a large role in keeping workplaces safe. However, it’s not easy to put together the proper policy and procedures to legally test your employees. That’s where GMS can help.

    GMS is a Professional Employer Organization that provides businesses with the HR tools and resources needed to help their business grow and succeed. Our experts can advise you on how to build a drug testing policy, as well as review your policy drafts to ensure that you and your employees are protected. Contact GMS today about how we can support your business through dedicated service and support.

  • As a small business owner, you have plenty of responsibilities. Some of these tasks are unenjoyable because they’re time-consuming or confusing, but there’s one particular job that’s unpleasant for everyone involved: disciplining employees.

    Whether it’s a minor transgression or a fireable offense, disciplinary discussions are as important as they are difficult. It’s essential that leadership tackles these issues head-on to address incidents and prevent future problems, but employers shouldn’t go into these discussions without a plan. Thankfully, progressive discipline policies give small businesses the direction they need to appropriately handle these unfortunate situations.

    What Is A Progressive Discipline Policy?

    Simply put, a progressive discipline policy is a process designed to address and modify actions or behaviors that are unacceptable in the workplace. These steps allow employers to make a good-faith effort to help employees learn from mistakes and give them a chance to meet certain standards. These expectations are spelled out through three core components:

    • Definitions – A set of clearly defined definitions and examples of what constitutes as unacceptable workplace behavior.
    • Consequences – Thorough descriptions of what how enemies will be disciplined for unacceptable behavior and how these actions can escalate to termination.
    • Resources – Details on who employees can go to with any issues, concerns, or questions.

    A progressive discipline policy allows employers to address not only conduct concerns, but also performance issues. A good policy gives management clear steps to correct individual and repeat problems, all while documenting these episodes for both the employee and employer. Having this type of policy in place provides multiple benefits for your small business.

    You set the ground rules for everyone

    A good policy allows your business to make performance and conduct expectations clear and spell out the consequences for not meeting those expectations. This information gives everyone the knowledge they need to meet and exceed working standards.

    You collect the necessary information for ending an employee relationship

    Termination is not an easy decision. A progressive discipline policy gives employers the means to fairly and objectively make this call by documenting how employees didn’t make the necessary improvements over time and outlining the repeated offenses.

    You protect your business

    A progressive discipline policy serves as more than just guidelines for improving employee behavior. An existing policy gives businesses evidence to back your decisions if an employee files a discrimination complaint or claims their termination was unfair. That existing document in your employee handbook can play a key role in mitigating risk in the future.

    The Four Key Steps For A Progressive Discipline Policy

    One of the key parts of any progressive discipline policy are the steps management should take to properly address offending employees. These steps range from initial notification all the way to termination, giving employers the means to both work with employees and document efforts to correct problematic performance or actions.

    1. Verbal warning

    The first step is to officially inform the employee about what they have done wrong. Meet with the offending employee in a confidential meeting to break down how they either haven’t met performance standards or displayed bad behavior. This conversation immediately sets your expectations and lays out next steps for the employee to recognize the issue at hand and correct it.

    While the warning is verbal, it’s still important to document the event to officially put the employee on notice. If possible, have an HR representative in the meeting to provide added support and provide backup. You’ll also want to create a document that includes a few key details:

    • When you gave out the verbal warning (including both the date and time of meeting).
    • The reason for the warning and what was discussed in the disciplinary meeting.
    • The next steps that both sides agreed to during the meeting.
    • Who was present in the meeting.

    2. Written warning

    If a verbal warning isn’t enough to improve performance or curb bad behavior, it’s time to present your concerns in writing. This formal written warning should include details on the policy and specifics on how the individual violated company rules. This document should also include expectations on how to correct the offense, what will happen if the employee is non-compliant, and the date you presented the written warning.

    As with verbal warnings, this meeting should be confidential and everyone involved must sign the form acknowledging the discussion. One difference is that you should also give the employee the opportunity to assess their own behavior on the written document. Let the employee know that signing the form isn’t an admission that they agree, just evidence that the discussion took place and that they are accountable for future corrective action. Once everyone on hand signs the form, you can add it to the employee’s personnel file.

    3. Final warning

    The final warning is very similar to doling out a written warning, except that it should be clear that this meeting is the employee’s last opportunity to comply with expectations.

    Once again, present a dated document that restates the policy in question, what they did wrong, and what must be done to correct this behavior. The key difference is that this document should clearly indicate that this meeting is a final warning and future noncompliance will result in the employee’s departure from the company. Once the form is signed by everyone on hand, add it to the same file as the rest of the warnings.

    4. Termination of employment

    If all three previous steps don’t work, it’s time to let the employee go. Meet with the offending employee and notify them that they’re no longer a part of the company. You should present this individual with a written, dated termination notice and save a copy for the company’s personnel records. Everyone present for this meeting should also sign this document.

    This meeting also serves as the right time to wrap up any tasks required to finalize the termination. You’ll need to inform the departing employee about what to expect in terms of receiving their final pay, which can depend on your state’s requirements. You’ll also need to collect and company property from the employee, which can include keycards, laptops, and other items or equipment. Once the employee retrieves any personal items, immediately change any relevant passwords and restrict prior access to company systems.

    Improve Employee Performance and Limit Risk with a PEO

    Your workers are your greatest asset, but that doesn’t make employee performance management any easier. Everything from creating thorough progressive discipline policies to conducting performance reviews not only takes time, but also has a major impact on your business’ success.

    The good news is that you don’t need to take on these responsibilities alone. GMS partners with businesses to take on the administrative burdens associated with managing employees, saving you precious time and protecting. Contact GMS today to talk to our experts about how we can save your time, money, and headaches through professional performance management.

  • When you own a business, salaries are a big deal. According to the Society for Human Resource Management, employees’ wages can account for 18% to 52% of your operating budget. Your employees play a key role in the success of your business and an efficient employee compensation plan is important for ensuring the pay structure of your business is working properly. A formal compensation structure can help your business manage salary expenditures and retain top talent that will help your company grow.

    What Is A Compensation Structure (And How Can It Help My Business)?

    A compensation structure, also known as a salary structure, is a framework that a business uses to determine compensation. A good structure sets pre-existing guidelines to delegate these pay increases in a fair, unbiased manner, as opposed to using inconsistent factors like negotiation or previous salary history. A formal structure typically includes standards for the following forms of compensation:

    • Starting salaries for various positions.
    • Managing when and how raises are addressed and awarded.
    • Distributing bonuses and commissions.

    Formalizing how you compensate your workers achieves a couple of goals for your business. To start, it creates a structure where you can create accurate staffing projections going into the hiring process, while allowing you to map out how future raises and bonuses will impact your total salary expenditures.

    A formal salary structure also gives employees more insight on how pay decisions are made. This information allows you to justify decisions with existing data and make the criteria for salary adjustments clear to everyone.

    Types Of Compensation Structures

    The good news about creating salary structures is that you don’t have to invent the wheel. There are some established compensation structures out there that you can adopt and adapt as needed. These include the following structures:

    • Broadband
    • Grade and range
    • Step
    • Market-based

    Broadband structures

    A broadband approach is a more traditional structure that was common for older companies. This type of structure creates “bands” of earnings that are based on seniority and position levels. As employees move up the hierarchy and stay with the company longer, they can move up to new bands.

    Broadband structures were very popular when people tended to stay in one job for most or all of their career. These structures typically have fewer bands, but each band has a broad salary range and multiple positions within each band.

    This type of system is good for rewarding employees who acquire new skills to advance from one band to another, or for companies who want extra flexibility in determining pay and promotions within a single band. However, the length of time it can take to move from one band to another may not appeal to ambitious young workers who want to be recognized for their achievements.

    Grade and range structures

    Grade and range structures are similar to broadband structures, but the “bands” are usually much smaller and are not tied to length of tenure. Every grade allows a company to group similar jobs together within and base that grade’s range on market rates, overall responsibilities, and organizational value. As employees advance to new higher grades, businesses can increase the salary range and earning potential to accommodate that level of value.

    The added bands allow for more flexibility to jump from one pay grade to another, rewarding employees that perform well. A series of grade levels allows business owners to visualize each level of responsibility and communicate them to employees. These qualities make grade and range structures a natural fit for larger businesses, companies with extended management hierarchies, and organizations with diverse roles who want more flexibility to promote employees earlier without as much of a commitment as broadband.

    Step structures

    While broadband and grade structures take increased skill or responsibility into account for promotions and hiring, step structures are much more focused on length of service. “Stepping” sets up a structure where employees receive fixed pay rate increases based on a pre-set schedule. For example, an employee with four years of experience would make more than one with two, depending on your stepping schedule.

    Step structures offer a couple of key advantages for both employers and employees: they’re easy understand and simple to manage. This type of compensation structure usually involves smaller increases per step, but employees will advance predictably up the ranks. Employees can very quickly understand what it takes to increase compensation, while employees can easily automate salary adjustment and forecast future expenditures based on set dates.

    These advantages make step structures a natural fit for businesses with smaller compensation budgets or those that want to ensure steady increases to company spending. Organizations that prefer to tie their compensation philosophy to tenure instead of individual performance will also find step structures appealing.

    Market-based structures

    Market-based salary structures are less about what is happening inside your company and more about external factors. Businesses with this type of philosophy will base salaries and proposed pay increases on data gathered from outside sources.

    This approach allows employers to benchmark starting salaries and promotions around what the market pays for similar positions. Businesses can then evaluate other external factors – cost of living, average compensation by location, etc. – to adjust their structure to their needs. For example, a business in a smaller market may offer slightly lower salaries than big cities because the cost of living is lower. By benchmarking salaries, businesses can be flexible enough to compete with the market for top talent.

    How To Create Your Salary Structure

    Now that you know the various salary structures, it’s time to create one that‘s best suited for your business. This process depends requires a few key steps to not only identify which type of structure is right, but also put that plan in motion.

    Identify the value of each position in your company

    Even though there may be salary data available for specific roles, they aren’t specific to your business. Take some time to evaluate just how essential each role is to the operations of your company. If a job is critical to your success, you may want to put that role in a higher pay grade or adjust your structure accordingly. This process will help you cater your structure to your exact needs so that you can attract and retain talent for pivotal positions while balancing your expenditures.

    Consider how your company stands compared to your market

    Your place in the market can dictate a lot about how you approach your employee compensation structure. This process involves asking yourself a lot of questions. For example, do you need to pay employees more than market-level wages to retain key talent? Do you need to adopt a lower-than-market strategy to stay within budget? Are employees in your market more likely to stay with your company for a long time?

    Each answer will help dictate which approach is right for your company. Identifying opportunities in your region and industry can help you balance what’s most valuable to your business with what you need to pay to compete with competitors.

    Formalize your compensation structure and align current employees with your strategy

    Once you have the answers you need, you can build a compensation strategy tailored to your needs. This compensation plan should include a detailed breakdown of each salary range, pay grade, or steps so that nothing is left unanswered. Document everything from minimum and maximum salaries for each position, timelines, and other details that pertain to your structure of choice.

    It’s also important to remember that this new structure applies to not only future hires, but also current employees. Take some time to evaluate your current employees’ salary rates and see how they compare to your new structure. You may find that some workers are behind – or ahead – of where they would be in the new system.

    Create a plan to have these outliers align with your new structure. For people behind schedule, that may call for greater increases to help them hit their expected minimum rate. Meanwhile, employees that are well ahead of schedule may call for a pay freeze or smaller increases until they match the compensation you identified as appropriate for your structure.

    Build a Compensation Structure That’s Right for Your Small Business

    Creating a new employee compensation plan is a daunting task for small businesses. It’s not just about money – these decisions also need to factor in the costs of hiring and training employees, navigating payroll, and the ever-present need for compliance. That’s why it’s helpful to go through these processes with the right partner.

    GMS works with small businesses to give them the tools and support they need to grow. Our experts can work with your company to implement salary structures that not only help you attract and retain key employees, but also work with your bottom line.

    Are your ready to make your business simpler, safer, and stronger? Contact GMS today to about how we can help you save time and money through payroll administration and other HR strategies.