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  • The U.S. Department of Justice (DOJ) recently announced significant updates to its evaluation of corporate compliance programs (ECCP) policy document, a critical reference for determining whether corporate compliance programs are robust and effective. These changes, which became effective on September 23, 2024, are designed to address evolving risks, particularly around emerging technologies like artificial intelligence (AI) and the use of data analytics in compliance operations. 

    Let’s explore what these updates mean for your organization and how to ensure your compliance program stays ahead of the curve. 

    Understanding The DOJ’s Evaluation Of Corporate Compliance Programs 

    The ECCP is a key resource that the DOJ uses to assess whether a company’s compliance program is well-structured and effectively implemented. The DOJ’s approach to evaluating corporate compliance now includes a particular emphasis on how businesses are managing the risks presented by AI and other new technologies. This evaluation can impact decisions related to criminal charges, monetary penalties, and ongoing compliance obligations such as corporate integrity agreements. 

    New Focus On AI And Emerging Technologies 

    The DOJ has made it clear: the rapid development and use of AI presents new challenges that must be managed proactively. Companies are now expected to have specific policies, procedures, and safeguards in place to certify that AI technology is not misused, whether intentionally or recklessly. Prosecutors will ask detailed questions about AI risk management, such as: 

    • Does the company assess how AI could impact its ability to comply with laws? 
    • How does the company integrate AI risk management into its broader enterprise risk strategies? 
    • What measures are in place to prevent AI misuse and guarantee trustworthiness? 
    • Are there controls ensuring AI is used as intended, and how is human oversight maintained? 

    To address these questions, your compliance program should include mechanisms for monitoring AI usage, auditing AI performance, and training employees on proper and ethical use of AI technology. The DOJ’s message is clear: companies cannot afford to ignore the risks associated with emerging technologies. 

    Leveraging Data Analytics In Compliance Programs 

    Another major focus of the ECCP update is the strategic use of data analytics in compliance efforts. The DOJ now expects companies to leverage data analytics tools to enhance their compliance operations and monitor program effectiveness. Prosecutors will evaluate whether compliance personnel have adequate access to data systems and whether the company uses data to improve efficiency and measures outcomes. 

    Key questions from the ECCP update include: 

    • Is the company using data analytics to make compliance operations more efficient? 
    • How does the company ensure the quality and accuracy of its data sources? 
    • Are there methods in place to measure the performance of data analytics models? 

    This emphasis on data access and quality means companies must invest in robust data infrastructure and provide the necessary resources for their compliance teams to monitor and respond to potential risks effectively. Compliance staff must be equipped with the tools and training needed to leverage data analytics for proactive risk management. 

    Why This Matters For Your Business 

    The DOJ’s updated guidance highlights the increasing complexity of managing compliance in a technology-driven world. Companies must be proactive in understanding and mitigating risks posed by AI and emerging technologies, ensuring that their compliance frameworks are adaptable and robust. Furthermore, businesses that fail to leverage data analytics in their compliance operations may face greater scrutiny. 

    Practical steps for compliance 

    1. Review and update your compliance policies: Make sure your program addresses AI risks and incorporates data-driven monitoring tools. 
    2. Train your staff: Educate your team on the ethical and compliant use of new technologies, including AI. 
    3. Leverage data analytics: Invest in data systems that enable real-time monitoring and performance assessments of your compliance program. 
    4. Conduct regular audits: Frequently review your AI systems and data practices to ensure compliance and identify areas for improvement. 

    The Role Of Compliance In A Digital World 

    The DOJ’s ECCP update underscored the need for companies to adapt to technological advancements while maintaining strong compliance standards. As emerging technologies continue to evolve, organizations must stay vigilant, proactive, and committed to upholding the highest levels of corporate integrity. 

    If you’re unsure whether your compliance program meets these new DOJ expectations, partnering with a professional employer organization (PEO) like Group Management Services (GMS) can provide clarity and guarantee your business remains compliant. 

    Contact GMS today to see how we can support your organization in effectively managing compliance risks. 

  • Writing employee write-ups is often an uncomfortable aspect of managing staff, but it is frequently necessary. If issues related to performance, attendance, or policy violations are not addressed properly, businesses can suffer from decreased productivity, lower employee morale, and even legal risks.

    A well-crafted employee write-up should serve several purposes: it must document the issue clearly, communicate expectations, support the employee’s improvement, and protect the business through consistent records.

    Below are eight common mistakes employers make when writing up employees, along with tips on how to avoid them.

    Key Takeaways

    • Address performance and conduct issues as soon as possible.
    • Keep documentation objective, factual, and free from emotion.
    • Clearly communicate expectations for improvement.
    • Deliver write-ups professionally and privately.
    • Consistent documentation helps protect both the employee and the employer.

    Why Are Employee Write-Ups Important?

    Employee write-ups are formal records of workplace performance or behavioral issues. When used properly, they help employers:

    • Maintain consistency across the workforce
    • Set clear expectations
    • Document disciplinary actions
    • Support employee development
    • Reduce compliance and legal risks
    • Create a record of corrective actions if additional discipline becomes necessary

    Mistake #1: Waiting Too Long to Address Performance Issues

    Why timing matters

    One of the biggest mistakes managers make is delaying disciplinary action.

    When weeks or months pass before an issue is addressed, details can become unclear, witnesses may forget important information, and employees may feel blindsided by the discipline.

    Addressing issues promptly allows employees to:

    • Understand the connection between their actions and the consequences
    • Correct behaviors early
    • Receive coaching before problems worsen

    Best practice

    Document and address performance concerns as close to the incident as possible. Early intervention often prevents larger problems later.

    Mistake #2: Letting Emotions Drive the Conversation

    Why objectivity matters

    Managers are human. Frustration is natural when dealing with repeated performance issues or workplace misconduct.

    However, disciplinary documentation should never reflect anger, assumptions, or personal opinions.

    Avoid language such as:

    • “You clearly don’t care about your job.”
    • “Your attitude is terrible.”
    • “You always create problems.”

    Instead, focus on observable facts.

    Best practice

    Before drafting a write-up:

    • Gather all relevant facts
    • Review documentation
    • Allow emotions to settle
    • Focus only on what occurred

    Remember, corrective action is designed to improve behavior, not punish employees.

    Mistake #3: Using Vague Language

    Why specificity is critical

    A write-up loses effectiveness when it lacks details.

    Compare these examples:

    Vague: Employee consistently arrives late.

    Specific: Employee arrived after their scheduled start time on June 2, June 7, and June 12, despite previous coaching regarding attendance expectations.

    Detailed documentation leaves little room for confusion and helps demonstrate consistency if future disciplinary action becomes necessary.

    Best practice

    Include:

    • Dates
    • Times
    • Locations
    • Specific behaviors
    • Previous conversations or warnings
    • Business impact

    The more specific the documentation, the stronger it becomes.

    Mistake #4: Failing to Collect Witness Statements

    Why additional documentation matters

    Some workplace incidents involve multiple people.

    When customers, employees, or supervisors directly observe an incident, their input can help provide a more complete account of what occurred.

    Examples include:

    • Workplace altercations
    • Harassment complaints
    • Safety violations
    • Customer service incidents
    • Policy violations witnessed by others

    Best practice

    Collect factual statements based on direct observations.

    Avoid opinions or assumptions and focus on what witnesses actually saw or heard.

    This additional documentation can help strengthen disciplinary decisions and demonstrate that the company conducted a fair review.

    Mistake #5: Not Providing Clear Expectations for Improvement

    Why corrective action should be actionable

    A write-up that only identifies a problem doesn’t help employees understand how to improve. Employees need a clear roadmap for success.

    Without specific improvement expectations, managers often struggle to measure progress and determine whether additional disciplinary action is justified.

    Best practice

    Clearly outline:

    • What behavior must change
    • How improvement will be measured
    • Deadlines or milestones
    • Available support resources

    For recurring issues, employers may implement a Performance Improvement Plan (PIP).

    A PIP typically includes:

    • Performance concerns
    • Expected outcomes
    • Action steps
    • Timelines
    • Follow-up dates

    When expectations are clearly documented, employees are more likely to understand what success looks like.

    Mistake #6: Delivering Write-Ups in the Wrong Setting

    Why the delivery method matters

    How a write-up is presented can be just as important as the documentation itself.

    Sending a disciplinary notice through email or discussing it publicly can create unnecessary tension and reduce professionalism.

    Best practice

    Whenever possible:

    • Meet privately with the employee
    • Review the write-up together
    • Allow time for questions
    • Explain next steps
    • Provide a copy for the employee’s records

    A respectful conversation helps maintain professionalism while reinforcing accountability.

    Mistake #7: Failing to Reference Company Policies

    Why policy references strengthen documentation

    Tie employee discipline directly to established company expectations.

    When write-ups reference specific handbook policies or workplace rules, employees can clearly see which standards were violated.

    This also supports consistency across the organization.

    Best practice

    Include:

    • The specific policy violated
    • Employee handbook references
    • Previous policy acknowledgments when applicable
    • Relevant workplace procedures

    Referencing policies helps reduce claims of inconsistent treatment and demonstrates that disciplinary decisions are based on established standards.

    Mistake #8: Not Following Up After the Write-Up

    Why follow-up completes the process

    Many employers view a write-up as the final step. In reality, it’s often just the beginning of the improvement process. Without follow-up, managers may never determine whether the employee corrected the issue.

    Best practice

    Schedule check-ins to evaluate progress. Monitor performance through:

    • Attendance records
    • Productivity metrics
    • Customer interactions
    • Quality of work
    • Supervisor observations

    Consistent follow-up demonstrates that the organization is committed to employee success, not simply documenting mistakes.

    Employee Write-Up Best Practices Checklist

    Before issuing a write-up, ask yourself:

    •  Is the issue being addressed promptly?
    •  Have I gathered all relevant facts?
    •  Is the language objective and professional?
    •  Have I included specific dates and examples?
    •  Did I reference applicable company policies?
    •  Have I outlined expectations for improvement?
    •  Will the write-up be delivered privately?
    •  Do I have a follow-up plan in place?

    If the answer to all eight questions is yes, you’re more likely to have documentation that supports both employee improvement and organizational compliance.

    How GMS Helps Employers Manage Employee Performance

    Employee write-ups are only one piece of effective performance management.

    Many business owners struggle with documenting employee issues consistently while balancing day-to-day operations. Through comprehensive HR support, GMS helps employers create performance management processes that are compliant, fair, and effective.

    Our HR experts can assist with:

    • Employee documentation practices
    • Performance management strategies
    • Progressive discipline programs
    • Employee handbook development
    • Manager training
    • HR compliance support
    • Performance improvement planning

    Whether you’re addressing attendance concerns, productivity issues, or workplace conduct violations, having a consistent process can help protect your business while supporting employee growth.

    Effective employee write-ups are not about punishment. They’re about communication, accountability, and creating opportunities for improvement.

    By avoiding these common mistakes, employers can build stronger documentation practices, promote workplace consistency, and create a more productive workforce.

    Need help improving your employee management processes? Contact GMS today to learn how our HR experts can help simplify performance management and support your business goals.

    Frequently Asked Questions

    What should be included in an employee write-up?

    A write-up should include:

    • The date of the incident
    • A description of the behavior or performance issue
    • Relevant company policies
    • Previous coaching or warnings
    • Expectations for improvement
    • Consequences of continued violations
    • Employee and manager acknowledgment sections
    Can employee write-ups help protect businesses from legal claims?

    Yes. Consistent, factual, and well-documented write-ups can provide evidence that employment decisions were based on legitimate business reasons and applied fairly across the workforce.

    What is a Performance Improvement Plan (PIP)?

    A Performance Improvement Plan (PIP) is a formal document that outlines performance deficiencies, establishes measurable goals for improvement, provides timelines, and identifies the support available to help the employee succeed.

  • Setting up a 401(k) plan for your small business not only helps you stand out in the competitive job market but also offers tax credits, deductions, and retirement savings for business owners. With the passing of SECURE Act 2.0, small businesses can take advantage of even more tax incentives, making a 401(k) plan more lucrative.

    The following steps will help get you started on establishing a 401(k) for your employees.

    Why Offer A 401(k) Plan?

    Many business owners assume a 401(k) plan is too costly or complex, but the benefits can far outweigh the negatives. By offering a 401(k) plan you can:

    • Attract and retain top talent: A recent study found that after health insurance, retirement plans are tied with company leave as the second most sought-after benefit. This study also found that 401(k) plans can help reduce turnover rates and boost retention by 81%.
    • Access tax credits: Small businesses with 50 employees or less may qualify for up to $5,000 per year in startup tax credits for the first three years, and an additional $500 annually for automatic enrollment, adding up to a potential $16,500 in total savings.
    • Secure retirement savings: A 401(k) plan lets business owners contribute to their own retirement savings while offering tax-deductible contributions for their company.

    Step 1: Research Retirement Options

    If you don’t have a 401(k) set up for your business, begin by exploring providers. Look into reputable financial institutions that offer robust support, payroll integration, and easy administration. Seek feedback from other small business owners about their experiences and consider a provider that can serve you for the long term.

    Consider factors such as:

    • Cost: How much is the plan? Is there a monthly fee associated with managing the plan?
    • Investment options: What funds are available in the plan?
    • Advice and guidance: Is there advice or counsel offered for participants?
    • Customer support: Is there easy access to reliable support if technical questions arise?

    Step 2: Choose Your 401(k) Plan Type

    Once you have a provider, select one or more plan types that best fits your business and employees’ needs:

    A traditional 401(k) allows employees to make pre-tax contributions via payroll deductions. Employers can contribute on behalf of employees, offer matching contributions, or both, with these contributions potentially subject to a vesting schedule. This plan must meet nondiscrimination requirements through annual actual deferral percentage (ADP), actual contribution percentage (ACP), and top-heavy tests to ensure fairness to ensure fairness. to ensure fairness.

    A Roth 401(k) is similar to traditional plans but contributions are made with after-tax dollars. This means withdrawals from the account are tax free upon retirement.

    The safe harbor 401(k) also resembles traditional plans except this plan requires employers to make contributions that employees own right away. These contributions can either match what employees put in or be a set amount for everyone who qualifies. A safe harbor plan doesn’t have to pass the ADP or ACP tests if employers provide their employees with clear and timely information about how the plan works and what their rights are.

    Lastly, the SIMPLE 401(k) is designed for small businesses with 100 or fewer employees. It is not subject to annual nondiscrimination tests and requires fully vested employer contributions. However, employees cannot receive contributions under other plans of the employer. If an employer offers alternative retirement plans, an employee utilizing the SIMPLE 401(k) plan can’t maintain those options.

    Once you have your plan type(s) selected, you should then consider other factors such as automatic enrollment and matching contributions. Automatic enrollment self-enrolls employees in your company’s plan, increasing participation rates and potentially qualifying your business for extra tax credits. Matching contributions is when an employer matches an employee’s 401k contribution up to a certain percentage of the employee’s salary.

    Step 3: Create A 401(k) Plan Document

    Draft a plan document that meets IRS requirements and outlines the specifics of your retirement plan. This document will include the plan’s terms, contribution structure, and eligibility criteria. Work with your provider to ensure compliance with federal regulations.

    Step 4: Set Up A Trust To Hold Plan Assets

    All 401(k) plan assets must be held in a trust to protect participants’ interests. Appoint at least one trustee to manage contributions, investments, and distributions, ensuring the plan’s financial integrity.

    Step 5: Maintain Accurate Records

    Accurate record-keeping is essential for tracking contributions and plan values. Many small businesses work with a contract administrator or financial institution to simplify this process and ensure ongoing compliance.

    Step 6: Inform Your Employees

    Provide employees with a summary plan description (SPD) that explains the plan’s benefits, rights, and features. Keep employees updated on investments and any plan changes. Transparent communication helps employees make informed decisions about their retirement savings.

    Step 7: Monitor And Maintain The Plan

    Regularly review your 401(k) plan to ensure it continues to meet your business and employees’ needs. A reliable provider can assist with compliance checks, manage reporting requirements, and help maximize the plan’s value.

    Tax Benefits Of Setting Up A 401(k) Plan

    Establishing a 401(k) plan offers several tax advantages for your business including:

    • Startup tax credits: As mentioned above, small businesses with up to 50 employees may qualify for a tax credit covering 100% of startup costs, up to $5,000 per year for the first three years. Medium-sized businesses (51-100 employees) are eligible for a 50% credit on administrative costs, capped at $5,000 annually for three years.
    • Employer contribution credit: The SECURE Act 2.0 introduced a credit that allows small businesses to receive up to $1,000 per employee in employer contribution credits. This amount phases out gradually over five years, providing 100% credit in the first two years, 75% in the third year, 50% in the fourth year, and 25% in the fifth year.
    • Employer contribution deduction: Employers can deduct contributions up to 25% of eligible employees’ compensation, directly reducing federal tax liability.
    • Pre-tax deferrals for employees: Contributions reduce taxable income for the employer and employees, as pre-tax contributions defer taxes until funds are withdrawn, potentially lowering employees’ tax bills in retirement.

    Setting Up Your 401(k) With Ease

    Establishing a 401(k) plan may seem complex, but the right partner can make the process straightforward and manageable. A professional employer organization (PEO) like Group Management Services (GMS) simplifies 401(k) administration, offering expertise in plan selection, compliance, and ongoing management. Let GMS help you build a retirement plan that benefits your employees and strengthens your business.

    Ready to get started? Contact GMS today to explore how we can help you set up a 401(k) plan best suited for your business.

  • As workplace temperatures rise, so does the need for robust safety measures to protect employees from heat-related risks. In August 2024, the Occupational Safety and Health Administration (OSHA) took a critical step by introducing a new proposed rule aimed at preventing heat injury and illness in both outdoor and indoor work environments. This proposal highlights OSHA’s commitment to reducing heat-related injuries and fatalities by mandating preventative measures in all general industry, construction, maritime, and agriculture sectors.

    U.S. employers are responsible for the consequences of workplace injuries. In addition to the resulting downtime and lost productivity, these incidents increase insurance premiums.

    Here’s what you need to know about this significant development and its implications for your business.

    Why OSHA’s Heat Prevention Standard Matters

    Excessive heat is the leading cause of weather-related fatalities in the U.S., posing significant risks to workers in both outdoor and indoor settings where cooling measures are limited. According to the Bureau of Labor Statistics, workplace heat exposure caused 479 fatalities between 2011 and 2022 and over 33,000 work-related injuries. Many of these incidents could have been prevented with structured safety plans, which is exactly what OSHA aims to address with this new rule.

    Additionally, OSHA increased its penalty rates earlier this year. Violations now cost a business over $16,000 per infraction. This increase adds further motivation for employers to meet compliance standards.

    Key Components Of The Proposed Rule

    The proposed OSHA standard requires employers in all general industry, construction, maritime, and agriculture sectors to implement comprehensive heat prevention measures. The rule outlines several key requirements:

    • Heat hazard assessment: Employers must evaluate heat risks in their workplaces, considering both outdoor temperatures and indoor heat sources like machinery and equipment.
    • Heat injury and illness prevention plan: A core requirement of the proposal is for employers to develop a written plan that outlines specific steps for managing and mitigating heat hazards. This plan would clarify employer responsibilities, from ensuring access to water and shade to adjusting work schedules based on temperature.
    • Workplace controls: The rule proposes both engineering controls (such as cooling systems) and work practice controls (like rotating shifts and breaks) to reduce workers’ exposure to high heat.
    • Emergency response and training: Employers must establish protocols for responding to heat-related illnesses and train employees and supervisors on recognizing heat stress symptoms, administering first aid, and implementing preventive measures.

    Who Is Affected By The Rule?

    Workers in high-risk environments, particularly those exposed to direct sunlight or operating heat-generating machinery, would benefit significantly from this regulation. Some groups, such as pregnant workers and employees of color, who are disproportionately employed in essential roles at higher heat risk, stand to gain the most from these protections.

    Why Employers Should Prepare Now

    OSHA is currently inviting public comments on the proposal, with a deadline set for December 30, 2024. Employers have an opportunity to provide feedback, but it’s also an ideal time to begin implementing preventive strategies. Preparing ahead can help businesses align with potential regulatory requirements while fostering a safer work environment.

    Alternatively, small and midsize businesses (SMBs) should consider partnering with a professional employer organization (PEO). PEOs like Group Management Services (GMS) not only ensure compliance with OSHA but also implement cost-containment and loss-prevention strategies to lower workers’ compensation rates and save your hard-earned money.

    Next Steps For Employers

    To get ahead, employers can start by:

    • Assessing workplace heat risks: Conduct a thorough evaluation of both outdoor and indoor work environments to identify areas where heat hazards exist.
    • Developing a heat safety plan: Outline procedures to provide hydration, shade, and cooling measures, and identify work adjustments during high-heat periods.
    • Engaging in OSHA’s comment period: Employers can visit Regulations.gov to submit comments or participate in the public discussion to help shape the final rule.

    Taking Action To Ensure Compliance And Safety

    With OSHA’s heat prevention proposal, businesses now have to mitigate one of the leading environmental risks in the workplace. Taking proactive steps not only ensures compliance but also underscores a commitment to employee health and safety, a core value for any successful organization.

    For additional support, GMS has a team of workers’ compensation experts who work closely with your company to create a comprehensive risk management plan tailored to meet OSHA standards. Our team can support you through every step, assessing the heat risks in your workplace and complying with OSHA. Contact us today, and let us help you create a safer and more compliant workforce!

  • The Internal Revenue Service (IRS) has announced the annual adjustments to the standard deduction and tax brackets for tax year 2025, effective January 1, 2025. It’s important to note that these figures will be used to prepare your 2025 tax returns in 2026, not for your 2024 tax returns. Understanding these changes is vital for effective business planning and budgeting. 

    If you don’t anticipate significant changes in your financial situation for 2025, you can use these updated numbers to estimate your tax liability. However, if you expect changes such as increased income, getting married, starting a business, or having a baby, you should consider adjusting your withholding or estimated tax payments accordingly. Continue reading to understand how the adjustments impact you and your employees. 

    2025 Tax Bracket Overview 

    Each year, the IRS adjusts tax brackets to reflect changes in the cost of living, which helps maintain taxpayer purchasing power. For tax year 2025, the top tax rate remains 37% for individual single taxpayers with incomes greater than $626,350 ($751,600 for married couples filing jointly). The other rates are: 

    • 35% for incomes over $250,525 ($501,050 for married couples filing jointly). 
    • 32% for incomes over $197,300 ($394,600 for married couples filing jointly). 
    • 24% for incomes over $103,350 ($206,700 for married couples filing jointly). 
    • 22% for incomes over $48,475 ($96,950 for married couples filing jointly). 
    • 12% for incomes over $11,925 ($23,850 for married couples filing jointly). 
    • 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly). 

    Standard Deduction And Personal Exemptions 

    The IRS defines the standard deduction as a precise dollar amount that reduces the amount of income on which you’re taxed. A standard deduction consists of the sum of the basic standard deduction and any additional standard deduction amounts for age and blindness. The standard deduction has also increased for 2025: 

    • For single taxpayers and married individuals filing separately for tax year 2025, the standard deduction rises to $15,000 for 2025, an increase of $400 from 2024. 
    • For married couples filing jointly, the standard deduction rises to $30,000, an increase of $800 from tax year 2024.  
    • For heads of households, the standard deduction will be $22,500 for tax year 2025, an increase of $600 from the amount for tax year 2024. 
    • Personal exemptions for tax year 2025 remain at zero, as in tax year 2024. The elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act of 2017. 

    Additional IRS Adjustments 

    The IRS has updated a variety of other thresholds for 2025: 

    • Alternative minimum tax (AMT) exemption: $88,100 for single filers and $137,000 for married couples filing jointly. 
    • Earned income tax credit (EITC): Maximum EITC amount rises to $8,046 for qualifying taxpayers with three or more children. 
    • Flexible spending account (FSA): The contribution limit increases to $3,300. 

    For in-depth details regarding the 2025 adjustments, click here. 

    What Your Employees Should Know 

    The new tax brackets apply to all earnings starting January 1, 2025. Employees should be provided with the resources necessary to make informed decisions. The IRS offers a tax withholding estimator that helps individuals determine if they have too much federal income tax withheld, which could reduce their take-home pay. Alternatively, it can assist employees with additional income sources in deciding whether to withhold more or make an estimated tax payment to avoid a tax bill. Employees can also submit IRS Form W-4 to their HR or payroll department to ensure the correct federal income tax is being withheld. 

    What This Means For Business Owners 

    If you’re a business owner, it’s essential to understand the tax bracket adjustments and standard deductions. Paycheck withholding amounts and quarterly estimated tax payments can affect an employee’s income level subject to a higher tax bracket. Additionally, the following could impact your employees’ decisions: 

    Preparing For The Adjustments 

    Business owners should take proactive steps to prepare for these changes by: 

    • Reviewing payroll systems: Ensure your payroll systems are updated to reflect the 2025 tax brackets and standard deductions. This will help avoid discrepancies in employees’ paychecks. 
    • Communicating with employees: Inform your employees about the changes and how they might impact their take-home pay. Providing resources like the IRS tax withholding estimator can help them make informed decisions. 
    • Adjusting financial plans: Revisit your business’s financial plans and budgets to account for changes in tax liabilities. This includes reviewing estimated tax payments and potential impacts on cash flow. 
    • Consulting with tax professionals: Engage with tax advisors to understand the full implications of these changes on your business and to ensure compliance with IRS regulations. 

    How GMS Can Help With Tax Compliance 

    Navigating tax changes can be challenging, especially when it comes to payroll compliance. Failing to comply can result in hefty penalty fees. It is estimated that 40% of small businesses pay tax fines of more than $850 annually. GMS offers expert payroll tax management services, ensuring your business complies with the latest IRS updates. From handling payroll deductions to managing employee contributions, our services simplify your tax obligations, helping you focus on growth. Contact us today to learn how we can support your business.  

  • Starting in January 2025, California employers must adjust their hiring practices to align with a new amendment to the Fair Employment and Housing Act (FEHA). Senate Bill 1100 prohibits employers from requiring job applicants to have a driver’s license unless driving is an essential and unavoidable part of the job. This change aims to support the employment of non-drivers who rely on alternative forms of transportation like ride-hailing services, public transit, biking, or walking. 

    Understanding The FEHA Amendment 

    California law already prohibits discrimination based on an applicant’s immigration status, with nonstandard driver’s licenses (such as AB 60 licenses) issued to individuals who cannot prove legal presence in the United States. However, the new legislation expands protections to those without any form of driver’s license, aiming to ensure that transportation barriers do not unnecessarily limit job opportunities. 

    Under the amended FEHA, employers can no longer include blanket statements in job ads or applications requiring a driver’s license unless: 

    1. Driving is an essential job function. The employer must reasonably expect the role to require driving in a way that cannot be replaced by alternative transportation. 
    2. Alternative transportation is not comparable. The employer must determine that using a ride-hailing service, taxi, or other modes of transportation would not be feasible in terms of travel time or cost. 

    The law aims to prevent discrimination against individuals who either cannot afford to maintain a vehicle or whose physical limitations prevent them from obtaining a license, such as those with visual impairments. 

    Implications For Employers 

    Employers in California should review their hiring materials, including job postings, applications, and recruitment ads, to ensure compliance with the new FEHA requirements. Starting January 2025, employers must clearly evaluate whether a driver’s license is necessary for the job or if alternative transportation methods could fulfill the role’s demands. 

    Businesses operating in Los Angeles County must comply with local hiring regulations. This includes the Fair Chance Ordinance, which imposes specific requirements for job solicitations. 

    Why This Matters 

    This amendment is part of a broader effort to remove barriers to employment, particularly for those who rely on public transportation or ride-sharing services due to financial or physical limitations. Employers who fail to comply with the new law not only risk legal penalties but also a loss of access to a broader, more diverse talent pool. This adjustment offers an opportunity for employers to rethink what is truly necessary in their job requirements, encouraging inclusivity in the workplace. 

    How GMS Can Help 

    Staying compliant with labor laws can be complex. At Group Management Services (GMS), we specialize in helping businesses navigate regulatory changes like California’s new FEHA amendment. Whether you need assistance with drafting compliant job descriptions, updating your hiring processes, or managing other HR functions, GMS has the expertise to ensure your business remains compliant and avoids costly penalties. Contact us today to learn more about how we can support your HR and compliance needs. 

  • In today’s unpredictable U.S. health care landscape, businesses are struggling more than ever to provide competitive health benefits while controlling rising costs. Next year, U.S. employers project a 9% increase in health care plan costs – 2.6% higher than last year’s budget increases. Each employee covered by company health plans will cost $16,000 annually. 

    Small and midsize businesses (SMBs) are finding it particularly daunting to offer competitive health care plans compared to their larger competitors. A single hospital claim can cost a company over $100,000. Employers struggling with these rising costs often look for assistance from external organizations specialized in fighting claims and managing benefits administration. 

    Continue reading to discover key strategies that can help your business manage its health care costs and optimize employee benefits for the coming year. 

    What Type Of Medical Insurance Does My Business Need? 

    There are two primary types of medical insurance: 

    Fully funded 

    • This is the most common option, where insurance rates are set based on factors such as age, gender, and location. 
    • While easy to manage, businesses have little insight into how their plan is performing – such as how well the plan controls costs, processes claims, and manages employee health care usage. 

    Level funded 

    • This option provides greater transparency, as it’s based on the health of the group, size of the company, and expected usage. 
    • This gives SMBs a better understanding of their plan’s performance and predict renewal costs. 
    • However, it can be more unpredictable, especially for smaller groups, because they’re tied to the group’s health and claims history. A single high-cost claim can cause unpredictable spikes in renewal premiums, making budgeting less stable compared to fixed premium plans. 

    Given these options, businesses should ask critical questions when selecting a health insurance partner. SMBs need to consider factors beyond the deductible, such as copayments and the maximum out-of-pocket costs.

    Catastrophic Claims 

    Catastrophic claims, where serious injuries result in permanently preventing an employee from working, now account for over 20% of cost increases. Without proper audits and cost-control initiatives, SMBs are at the mercy of health care providers.  

    Measures that can have a positive impact on cost savings include: 

    Case management 

    • Health care professionals coordinate complex care for employees to ensure they receive appropriate treatment, helping avoid unnecessary services and reducing overall costs. 

    Disease management 

    • Employers can reduce expenses associated with emergency medical care by offering guidance and resources to support employees with chronic conditions. 

    Nurse advice lines 

    Claim audits 

    • Reviewing medical bills ensures accuracy and helps catch errors or overcharges. 

    Rising Cost Of GLP-1 Drugs 

    A major driver behind the increase in prescription drug costs is the rising demand in Glucagon-Like Peptide-1 (GLP-1) drugs, such as Ozempic, Wegovy, and Trulicity. Commonly prescribed to treat diabetes and obesity, GLP-1 drugs are responsible for over 75% of the increase in costs. These medications, ranging from $1,000 to $1,500 per month, can quickly strain an employer’s budget. 

    Providing employees access to more affordable services like telehealth, coaching, or gym membership reimbursements also allows you to support their healthy lifestyle change without breaking the bank. 

    Medical Provider Costs 

    “Your worst-case scenario is what you need to plan for,” -GMS’ Benefits Sales Manager, Claire McCarus 

    To combat these rising costs, SMBs should design a plan that includes: 

    Dependent eligibility audits 

    • A process that reviews and verifies that all dependents enrolled in a company’s health plan meet eligibility requirements. 

    High deductible health plans (HDHP) 

    • Insurance plans that offer lower premiums but require employees to meet higher deductibles, meaning they must pay more out-of-pocket costs before full coverage begins. 

    Spousal surcharges 

    • Additional fees are charged when an employee’s spouse has access to their own employer-sponsored health insurance but chooses to remain under the employee’s plan. 

    Formulary changes 

    • Adjustments to the list of prescription drugs covered by a health plan, aimed at promoting cost-effective medications and managing rising drug expenses. 

    At Group Management Services (GMS), we offer highly competitive health care plans that help business owners effectively manage rising health care costs. On average, our plans are 26% lower for individuals and 15% lower for families compared to the U.S. market. 

    What About Ancillary Benefits? 

    Ancillary benefits, such as dental, vision, life insurance, and disability, are an affordable way to enhance your benefits package without the high cost of medical insurance. Offering these supplementary benefits can also boost employee satisfaction and retention at a lower cost. 

    Partner With GMS 

    Managing your company’s health care plan is stressful and expensive, especially for smaller businesses. As health care costs continue to increase, you’ll want to start looking for ways to cut down on claims and prescription drugs and reorganize suitable medical plans for your business. 

    If all of this sounds daunting – don’t worry. There are companies with the sole purpose of helping you manage the backend complexities that come with running a business. Outsourcing to a partner like GMS can simplify the administrative burden, providing a dedicated team to handle employee inquiries, manage claims, and even oversee the Consolidated Omnibus Budget Reconciliation Act (COBRA) administration.  

    This support helps ensure nothing falls through the cracks, enabling employers to focus on their business rather than the complexities of benefits administration. Contact us here so we can help your business reduce avoidable expenses and alleviate the stress associated with managing employee benefits. 

  • The Social Security Administration (SSA) has announced a 2.8% cost-of-living adjustment (COLA) for 2026. This increase will provide higher benefits for approximately 75 million Social Security and Supplemental Security Income (SSI) recipients. The annual adjustment is designed to help beneficiaries keep pace with inflation and rising living expenses.

    While the COLA primarily affects retirees and benefit recipients, employers should also pay attention to annual Social Security updates. Changes to earnings limits, taxable wage bases, and payroll requirements can impact payroll administration, compliance, and workforce planning.

    Key Takeaways

    • The Social Security COLA for 2026 is 2.8%.
    • Approximately 75 million Americans receiving Social Security or SSI benefits will be impacted.
    • The average retired worker’s monthly benefit will increase from $2,015 to $2,071.
    • Employers should review payroll systems to account for updated Social Security earnings limits and taxable wage thresholds.

    What Is the Social Security COLA?

    The Social Security cost-of-living adjustment (COLA) is an annual increase intended to help Social Security and SSI beneficiaries maintain their purchasing power as prices rise.

    Each year, the SSA uses changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine whether benefits should increase. When inflation causes everyday expenses to rise, a COLA helps offset the increased cost of necessities such as housing, groceries, transportation, and healthcare.

    For 2026, the SSA announced a 2.8% increase, with updated benefit payments beginning in January 2026 for Social Security beneficiaries and December 31, 2025, for SSI recipients.

    How Much Will Benefits Increase in 2026?

    The 2.8% COLA means higher monthly payments for millions of Americans receiving Social Security benefits.

    According to the SSA, the average retired worker will see monthly benefits increase from $2,015 to $2,071, an increase of approximately $56 per month.

    Other estimated monthly benefit increases include:

    • Aged couple, both receiving benefits: $3,120 to $3,208
    • Aged widow(er) alone: $1,867 to $1,919
    • Disabled worker: $1,586 to $1,630
    • Disabled worker with spouse and one or more children: $2,857 to $2,937

    The exact increase varies based on an individual’s current benefit amount.

    What Other Social Security Changes Take Effect in 2026?

    In addition to larger benefit payments, several Social Security thresholds are increasing in 2026.

    Higher Taxable Wage Base

    The maximum amount of earnings subject to Social Security tax will increase from $176,100 in 2025 to $184,500 in 2026. This means higher-income employees and their employers will pay Social Security taxes on a larger portion of annual earnings.

    Increased Earnings Limits

    The annual earnings limit for individuals receiving benefits before reaching full retirement age will increase to $24,480. Workers who exceed this threshold may have a portion of their benefits temporarily withheld.

    For individuals reaching full retirement age during 2026, the earnings limit rises to $65,160. Individuals who have already reached full retirement age are not subject to earnings limits.

    Higher Maximum Social Security Benefit

    The maximum monthly Social Security benefit for a worker retiring at full retirement age will increase from $4,018 in 2025 to $4,152 in 2026.

    What Do Employers Need To Know About the COLA Increase?

    Although the COLA primarily impacts beneficiaries, employers should understand how annual Social Security changes affect payroll and compliance responsibilities.

    Payroll systems should be updated to reflect the new taxable wage base and any related withholding requirements. Businesses should also be aware of changes affecting employees who continue working while collecting Social Security benefits.

    Organizations that offer retirement education or financial wellness resources may also want to update employee communications to reflect the latest Social Security figures. Providing employees with current information can help support retirement planning efforts and reduce confusion about benefit eligibility and earnings limitations.

    Why Should Businesses Pay Attention to Social Security Updates?

    Employment regulations and payroll requirements change regularly. Even updates that appear to primarily affect employees can create compliance considerations for employers.

    Understanding annual Social Security changes can help businesses:

    • Maintain accurate payroll processing
    • Ensure compliance with payroll tax requirements
    • Support employees approaching retirement
    • Improve retirement and benefits communications
    • Reduce the risk of reporting errors

    Staying informed about these changes can help employers avoid administrative challenges and maintain compliance throughout the year.

    Stay Ahead of Payroll and Compliance Changes With GMS

    Keeping up with Social Security adjustments, payroll tax updates, and evolving employment regulations can be time-consuming for business owners. Maintaining compliance requires accurate payroll administration, ongoing monitoring, and a clear understanding of changing requirements.

    GMS helps businesses simplify payroll, benefits administration, HR management, and compliance responsibilities through comprehensive PEO services. Our experts stay current on regulatory changes so employers can focus on running and growing their businesses.

    Ready to spend less time worrying about payroll compliance and more time focusing on your business? Contact GMS today to learn how our team can help.

    Source: Social Security Administration 2026 COLA Fact Sheet and SSA Cost-of-Living Adjustment Information.

    Frequently Asked Questions

    Will the 2026 COLA increase all Social Security benefits?

    Yes. The 2.8% COLA applies to most Social Security benefits, including retirement, survivor, and disability benefits, as well as Supplemental Security Income (SSI) payments.

    Do I need to apply to receive the 2026 COLA increase?
    No. Eligible beneficiaries do not need to apply for the annual cost-of-living adjustment. The increase is applied automatically by the Social Security Administration.
    Can the Social Security COLA affect Medicare premiums?

    Potentially. While a COLA increases Social Security benefits, Medicare Part B premiums and other healthcare costs may also change from year to year. Beneficiaries should review their annual benefit and Medicare notices to understand the net impact on their monthly payments.

    Does the Social Security COLA affect employer payroll taxes?

    The COLA itself does not directly change employer payroll tax rates. However, related Social Security updates, such as increases to the taxable wage base, can affect payroll tax obligations for employers and employees.

  • On September 24, 2024, the Pittsburgh City Council passed a groundbreaking ordinance that prohibits employment discrimination based on an individual’s status as a medical marijuana patient. Signed into effect immediately, this ordinance has significant implications for employers, particularly those with five or more employees. This new law prohibits pre-employment drug tests for marijuana for applicants who hold valid Pennsylvania medical marijuana cards. It also imposes limitations on employer-initiated marijuana testing during the course of employment without suspicion of impairment.” 

    Key Provisions Of The Pittsburgh Medical Marijuana Ordinance 

    The ordinance sets a new precedent in employment law, shifting the focus from how employers handle positive marijuana test results to whether they can conduct marijuana tests at all. Unlike similar protections in other states, such as New Jersey, where employers can test but are limited in their ability to take action based on a positive result, Pittsburgh’s ordinance removes the option to test medical marijuana patients altogether, except under specific safety-related circumstances. 

    The ordinance defines a medical marijuana patient as someone with a serious medical condition, disability, or handicap who is certified under Pennsylvania law to use marijuana for medical purposes. This protection applies only to individuals participating in Pennsylvania’s Medical Marijuana Program. The law does not extend to non-participants or recreational marijuana users. 

    While this protection offers significant benefits to medical marijuana patients, it poses a challenge for employers. Typically, employers do not know whether an applicant or employee holds a medical marijuana card unless the individual volunteers that information, making it challenging to apply the ordinance in pre-employment scenarios where medical disclosures are not yet allowed. 

    Exceptions And Limitations 

    Though the ordinance is comprehensive, it does include several critical exceptions. Employers can still test applicants or employees for marijuana if they work in certain safety-sensitive positions. For example, individuals subject to U.S. or Pennsylvania Department of Transportation regulations, those who handle firearms, or employees in positions with specific collective bargaining agreements that mandate drug testing are exempt from the ordinance’s protections. 

    Additionally, Pennsylvania’s Medical Marijuana Act allows employers to take action against employees under the influence of marijuana while performing specific high-risk tasks. This includes working with chemicals requiring government permits, operating heavy machinery or high-voltage equipment, or performing duties at heights or in confined spaces. 

    The ordinance allows employers to: 

    • Discipline employees under the influence of marijuana at work. 
    • Prohibit marijuana use in the workplace. 
    • Test employees for illegal drug use. 
    • Conduct drug tests if there is reasonable suspicion of impairment. 
    • Perform drug tests following workplace accidents. 

    Employers must navigate these provisions carefully to ensure compliance while maintaining workplace safety. 

    Implications For Employers 

    For businesses operating in Pittsburgh, the new ordinance necessitates reevaluating pre-employment and workplace drug testing policies. Employers should implement clear processes for identifying medical marijuana cardholders. After conditional job offers, employers should ensure that safety-sensitive positions are properly classified and update their policies to reflect the ordinance’s testing limitations. 

    Failing to comply with these new regulations can expose employers to potential legal risks, including discrimination claims. This adds another layer of complexity to already intricate employment law compliance requirements. 

    How GMS Can Help 

    Navigating changing employment laws, particularly around medical marijuana, can be challenging for employers. At GMS, we understand how complex it is to stay compliant with constantly changing local and federal regulations. Our team of experts can help you develop HR policies that align with the new Pittsburgh ordinance, ensuring your business remains compliant while ensuring a safe and productive work environment. 

    Whether your business needs assistance with pre-employment procedures, policy development, or ongoing employee management, GMS can provide the tailored support you need. We take care of the administrative and compliance burdens so you can focus on growing your business. Contact GMS today to learn more about how we can help you adapt to these new regulatory changes. 

  • Many working parents in California need time off to manage school-related activities or care for their sick children throughout the year. For employers, understanding the state’s leave entitlements is critical to maintaining compliance while supporting employees’ work-life balance. Continue reading for an overview of key California leave laws for parents and caregivers that businesses should consider. 

    Supporting Involvement In Education 

    The Family-School Partnership Act requires employers with 25 or more employees at a single location to provide eligible employees with up to 40 hours of unpaid leave each year to participate in their children’s school activities. Eligible employees include parents, guardians, and grandparents who have custody of children in grades K-12 or those attending licensed daycare facilities. 

    This leave can be used for activities such as school meetings, field trips, or parent-teacher conferences. However, it is important for employers to note that this leave is capped at eight hours per month, and employees may be required to use accrued vacation or paid time off (PTO) before taking unpaid leave. Additionally, employers can request that employees provide reasonable advance notice when taking leave for school-related activities. 

    Protecting Parent Involvement 

    Under California Labor Code Section 230.7, employers are prohibited from discriminating against or terminating employees who need time off to attend school meetings related to their child’s suspension or expulsion. In these situations, parents and guardians have a right to be present under California Education Code Section 48900.1. Employers must ensure their policies do not penalize employees for fulfilling their responsibilities as parents in these difficult circumstances. 

    Caring For Sick Children 

    When cold and flu season hits, parents often need time off to care for their sick children. California’s Paid Sick Leave law allows employees to use their accrued sick time for their own health needs or to care for a sick family member, including children. This can include time off for preventive care, diagnosis, or treatment. 

    As of January 1, 2024, the minimum mandated paid sick leave increased to five days or 40 hours per year. Employers should ensure they are meeting this requirement and be mindful of any additional local sick leave ordinances that may apply. Many cities and counties in California have their own sick leave laws that may be more generous than the state standard. 

    Best Practices For Employers 

    To create a supportive and compliant workplace, it’s important for employers to: 

    1. Review and update leave policies: Ensure that leave policies comply with state and local laws, including updates to the minimum paid sick leave.
    2. Communicate clearly with employees: Make sure employees are aware of their rights and the procedures for requesting leave. Consider updating employee handbooks to reflect any changes in the law.
    3. Monitor local ordinances: In addition to state laws, California has many local ordinances that may require additional leave or benefits. Keeping track of these changes is essential for maintaining compliance.

    How GMS Can Help 

    Navigating California’s complex employment laws, especially as they relate to family and medical leave, can be challenging. GMS helps businesses stay compliant by offering comprehensive HR services that keep you informed of regulatory changes and ensure your policies meet legal requirements. Whether it’s managing leave entitlements, sick leave policies, or other employment law compliance, GMS is here to guide your business through the intricacies of California labor laws, reducing risk, and helping you focus on your business’s success. Let us take care of the details so you can stay compliant and provide a supportive environment for your employees.