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  • It’s easy to recognize certain milestones, but it’s not as simple to think ahead and avoid growing pains. Reaching the 50-employee threshold is a momentous occasion, but it also means that it’s time to consider some potential changes. Aside from taking the right steps to make sure your company is compliant with federal and state laws – don’t worry, we cover compliance considerations in another post – here are five ways to prepare your business for growth.

    A management team helping run a 50-employee business. 

    Embrace Process Documentation

    As you employ more people, it’ll be harder to keep everyone on the same page. You may know the most efficient way to complete something, but you can’t always be there to share this knowledge. Is there a specific way that something at your business should be done? Write that process down so that everyone has access to it. 

    Process documentation allows you to identify the core parts of your business and document the steps that it takes to consistently perform important tasks the right way. As you grow, these standard operating procedures can help train and guide new employees so that they know what to do and how to do it. 

    You should also document any tools or procedures that make a process more efficient. Creating operational best practices or process templates will benefit your workforce, while making your business more efficient. Make these documents available to your employees so that they save time instead of starting everything from scratch.

    Improve Company-Wide Communication

    Good communication is a crucial for any organization, but it can be hard to keep your company connected as it grows. In fact, it can become nearly impossible to keep regular face-to-face communication possible with everyone, especially if you have employees who work remotely. As a result, it’s important to give you and your employees ways to initiate company-wide conversations. For example, a cloud-based collaboration tool like Slack can help employees stay connected, while video conferencing platforms like Zoom can benefit remote employees and improve communication with clients and customers, depending on your business.

    In addition to providing more ways to communicate, you should also consider creating a comprehensive communication strategy for your business. This strategy can help your company establish a recognizable brand and consistent messaging for people outside of your business. This way, your employees have guidance not only on what to say, but also how to say it. According to the Society for Human Resource Management, a communication strategy should include the following elements:

    • Top-down strategies where senior management sets the tone for a cascading series of messages
    • A budget for various types of communication vehicles depending on need
    • An evaluation process to determine the right messaging for specific situations
    • A method for generating feedback and using it to shape follow-up messages
    • A customized delivery approach with communication materials that are easy to understand

    Entice Employees with New Benefits

    While the 50-employee threshold makes it a requirement for your business to offer health insurance, that doesn’t mean you shouldn’t consider providing other benefits as well. Finding good, new talent – as well as keeping current employees – is critical for a growing company. 

    An attractive benefits package can help you reward your current employees while enticing better candidates to your business. Aside from health insurance, Employee Benefits News found that employees looked for the following types of benefits:

    • Monetary bonuses (54 percent)
    • Paid vacation (53 percent)
    • Retirement plan with defined benefits (51 percent)
    • Flex-time (51 percent)
    • Employer matches for retirement plans (50 percent)
    • Ancillary health insurance benefits (vision, dental, etc.) (48 percent)
    • Paid sick leave and personal days (48 percent)
    • Profit sharing (40 percent)

    In addition to these benefits, consider some other options that may be especially valuable to your employees. Flexible work times and environments are a great perk for employees with young children. Roughly 80 percent of millennial employees show interest in companies that offer student loan repayment assistance. It’s hard to grow without good employees, so think about ways to make sure your benefits package matches the quality and type of job candidates you need to succeed.

    Build a Management Team with Defined Roles

    It’s common for small companies to employ people who can do a little bit of everything. That goes for the owners, as well. While there’s a time where it’s fine to juggle multiple roles, you’ll reach a point where you need to build a management team and assign different responsibilities.

    It can be hard to step away from having a hand in every aspect of your company, but you can’t be an expert at everything. Consider creating an organizational chart and identifying people who can oversee key aspects of your company. This management team can take the burden off you so that you can focus on what you’re best at – the continued growth and success of your business.

    Find an HR Partner

    A good management team isn’t the only group that can help you ease your workload. A growing company has a mounting list of internal administrative responsibilities, from handling payroll for all your employees to taking the measures required to keep your business compliant with federal and local laws. Proper management of these responsibilities take both HR expertise as well as time. Fortunately, a Professional Employer Organization (PEO) can help you on both accounts.

    The right PEO allows you to cost-effectively outsource critical HR functions so that you can spend your time elsewhere. A PEO partners with your company to co-employ your workforce as it relates to payroll administration, employee benefits, and any other functions that you need managed. This process gives you access to a range of HR experts who help you make informed business decisions without losing control of your company.

    You don’t have to grow your company by yourself. Whether you just hit the 50-employee milestone or only have a few workers, Group Management Services can help you manage key administrative needs. Contact GMS today about how we can make your business simpler, safer, and stronger through comprehensive HR services.

  • The 50-employee mark is more than just a milestone; it’s also an important number for some major regulation requirements. Once your business has 50 full-time employees, various federal and state laws become mandatory, which can wreak havoc on your business if you don’t prepare for them. Here’s what your business needs to do to stay compliant once it reaches 50 full-time employees.

    Multiple employees during a training session at an applicable large employer.

    Health Insurance

    While smaller businesses can choose to offer health insurance, it becomes a requirement once your business reaches 50 or more full-time or full-time equivalent employees. At that point, the Affordable Care Act designates your business as an applicable large employer (ALE).

    Any ALE is required to meet the employer shared responsibility provisions found in the Affordable Care Act. These provisions give ALEs two options:

    • Offer health coverage that the ACA deems “affordable and provides “minimum value” to full-time employees and their dependents
    • Make a payment to the IRS any of the ALE’s full-time employees receive a premium tax credit for purchasing individual coverage on a Health Insurance Marketplace

    In addition to offering coverage – or opting to not offer coverage and pay penalties – ALEs are required to report to the IRS about their health care coverage. This means every ALE must file both Form 1095-C and Form 1094-C to the IRS, as well as a similar statement for each full-time employee.

    Determining full-time equivalent employees

    You may have noticed that threshold to be considered an ALE was set at 50 full-time or full-time equivalent employees. This means that you don’t need 50 strictly full-time employees to meet ALE designation if you have enough part-time individuals to qualify.

    Full-time employees include any worker who averages at least 30 hours of service per week in a calendar month. Full-time equivalent employees are a combination of individuals who do not meet full-time specifications, but whose combined work is determined to equate to that of a full-time worker.

    Per the IRS, there is a two-step process to determine the number of full-time equivalent employees at your business.

    1. Combine the number of hours of service of all non-full-time employees for the month (do not include more than 120 hours of service per employee)
    2. Divide the total by 120

    The total number represents a company’s number of full-time equivalent employees. That total would then be added to the number of regular full-time employees. If the combined number is at least 50 – for example, 40 full-time employees and 10 full-time equivalent employees – your business is considered an ALE.

    Family Medical Leave Act (FMLA)

    Unlike the Affordable Care Act, the Department of Labor (DOL) does not look to full-time and full-time equivalent employees to determine which businesses must comply with FMLA. Instead, the DOL simply writes that “private employers with at least 50 employees are covered by FMLA.” FMLA also applies to businesses with fluctuating workforces as long as they had at least 50 employees for 20 or more total workweeks in the current or previous year. These employees must then meet the following stipulations to be eligible for FMLA:

    • Work for the employer for at least 12 months
    • Work at least 1,250 hours during the 12 months before the start of leave
    • Work at a jobsite where the employer has at least 50 employees within 75 miles

    If eligible, employees are entitled to take unpaid, job-protected leave for various permissible reasons. These include taking up to 12 weeks of leave in a 12-month period for the following:

    • The birth of a child and to bond with the newborn child within one year of birth
    • The placement with the employee of a child for adoption or foster care and to bond with the newly placed child within one year of placement
    • A serious health condition that makes the employee unable to perform the functions of his or her job
    • To care for the employee’s spouse, son, daughter, or parent who has a serious health condition

    FMLA Compliance requirements

    Covered employers must also take steps to notify employees about FMLA rights. The first step is to display an FMLA poster prepared by the DOL at all locations. The next is to provide general notice with the same information as the poster in the employee handbook. If no handbook exists – and it absolutely should – employers must distribute a general notice to all employees and any new individuals when hired.

    As expected, the FMLA has penalties in place for any employers who meet the 50-employee threshold who deny or interfere with permitted leave or fail to meet notification requirements. Updated penalty amounts can be found on the DOL website.

    Miscellaneous State Laws

    Only looking to federal requirements can land your business in hot water. Certain states have their own regulations for businesses once they reach the 50-employee threshold. One of the more notable examples is that New York employers with 50-plus full-time employees must give at least 90 days’ written notice for mass layoffs, employment losses, or relocations. This law is a variation of the federal Worker Adjustment and Retraining Notification Act (WARN), which only applies to businesses with at least 100 employers. As a result, you’ll want to consult with your state government’s site to review any local laws that go into effect at the 50-employee threshold.

    Prepare Your Growing Business

    Growth is great, but it can become a major problem if you aren’t prepared for the additional compliance concerns and internal responsibilities. More employees mean more time spent handling payroll management, benefits administration, and other key HR needs – unless you find a partner that can manage these critical functions and save you much-needed time.

    Whether you’re a startup or a 50-plus employee business, Group Management Services provides professional HR management to help you make your business simpler, safer, and stronger while you focus on ways to grow your company. Contact us today to talk to one of our experts about what we can do to help you protect your company now and prepare for the future.

  • Human resources are one of the most important components of any small business. However, the responsibilities often fall to the owner or an executive, as many small businesses don’t have the capacity for a designated HR department or full-time employee. Often, managing these HR functions in-house creates many challenges. 

    Small businesses find it helpful to outsource human resource management.

    Small Business HR Challenges

    When you devote so much time to growing your business and improving your products and services, how are you supposed to find the resources to manage HR? From recruitment and retention to payroll and benefits, it’s important that HR doesn’t fall by the wayside in a small business. Deficiencies in any of these areas could result in:

    • Non-compliance fines
    • Lack of talented employees
    • Inefficiencies that slow down your production cycle

    Below, we identified some of the most common HR challenges for small businesses and how you can overcome them.

    Hiring process

    Hiring new employees is a major time and financial commitment for a small business. When job ads and interviews are improperly handled, the recruitment process can quickly become a time-consuming headache. 

    For one, it takes an average of 23 days to find the right candidate, according to Glassdoor, taking time away from other important projects. For more technical positions, it can take a lot longer. On top of that, poor job descriptions can attract non-qualified applicants, eating away even more time to manually sift through each resume.

    A hurried interview process or failing to ask the right questions can then result in bad hires, which can cost nearly $15,000 according to CareerBuilder. While many small businesses rely on referrals when it comes to hiring, interviews need to be consistent and conducted in a way that attracts quality talent and provides a clear path toward making a job offer.

    Employee training and safety

    Once employees are hired, having HR resources can be a great asset during training to prevent costly errors and even injuries from occurring. However, many small businesses simply don’t have the time to properly train new hires, which could affect workplace safety.

    According to the National Safety Council, a worker is injured on the job every 7 seconds, with 25 percent of these injuries caused by contact with objects and equipment. Proper training can help prevent workplace injuries like sprains, strains, cuts, lacerations, and punctures as well as promote morale and retention.

    Employee handbook

    Along with poor training, new employees may look to the employee handbook to gain a better understanding of the work environment and job expectations. When was the last time you updated your handbook? An outdated employee handbook can cause miscommunication and even legal issues for a small business. Employee handbooks should be updated at least annually to reflect the ever-changing employment laws and regulations.

    Payroll

    For small businesses, managing payroll and filing taxes can be a time-consuming and challenging task. Small and mid-sized companies spend an average of $2,000 per employee each year to handle payroll, according to PricewaterhouseCoopers. Proper bookkeeping and tax filing may be a hassle, but they play an integral role in the success of your business when it comes to avoiding compliance issues. The IRS found that 40 percent of small businesses incur an average of $845 in penalties each year, which can be a huge financial burden.

    Employee time tracking

    Depending on where you live, you’ll need to comply with local, state, and federal laws regarding vacation, paid leave, breaks, and overtime for your employees. Without a solid time tracking system in place, it can be difficult to ensure your employees are being paid fairly. Utilizing an online platform can help save time and energy for both small business owners and their employees.

    Employee benefits

    In order to attract and retain top talent, it’s important for small businesses to include quality benefits in their employees’ compensation packages. Employees want comprehensive benefits that include everything from health insurance to retirement plans to supplemental insurance. However, many small businesses find that it can be very expensive and time-consuming to purchase and manage these benefits on their own, compared to the buying power of group benefits.

    Employee compliance

    Small businesses must adhere to federal regulations, and failure to comply is common and costly. Perhaps the most common compliance issue for small businesses is employee misclassification. According to the U.S. Department of Labor (DOL), up to 30 percent of audited businesses had misclassified employees. Many misclassify workers as contractors in error, so it’s important to know the difference. While the consequences vary depending on whether the DOL and IRS deem the misclassification intentional or unintentional, it can be a costly mistake. 

    Other laws include the Fair Labor Standards Act (FLSA), Equal Pay Act, and Americans with Disabilities Act (ADA), to name a few. It’s important to stay educated on these federal regulations in order to stay compliant.

    Conflict resolution

    When growing a business, there is a potential for conflict in the workplace, and ignoring it can cost time and money. A study by professional training and coaching company CPP, Inc. found that 85 percent of employees experience conflict in the workplace. Workplace conflict wastes nearly three hours per week, costing billions in paid hours. Not having an HR resource to properly handle conflict resolution will only take up more time and money in addition to dampening employee morale and retention rates.

    Employee retention

    When HR management issues aren’t handled properly, it can be difficult for small businesses to retain quality employees. According to the Society for Human Resource Management (SHRM), retention is a growing problem for many, with the average turnover rate sitting at an unhealthy 18 percent. Running the gamut from bad hires to insufficient benefits to conflict issues, employees are less likely to stay with companies that don’t take initiative when it comes to HR management.

    Your HR Solution

    Between recruiting and retaining employees to managing employee performance, there are many challenges small businesses face when it comes to the responsibilities of HR management. Outsourcing HR through a professional employer organization (PEO) like Group Management Services can help small businesses save time and money, while allowing you to focus on growing your business. 

    GMS provides comprehensive HR services, including payroll administration, risk management, employee benefits, and more. Additionally, GMS can perform HR audits to help your business improve HR functions in a fraction of the time. Contact GMS today to see how we can help you cover these challenges in human resource management, so you can focus on your core business.

  • As a small business owner, a day off from work can be hard to come by. Nevertheless, come election day, flu season, or travel season, your employees will need a resource to turn to in order to know whether or not they have to show up for work. It’s important to include an employee leave policy in your employee handbook, so your employees understand the rules and expectations about the amount of time they’re allowed to be away from work. 

    “There are so many different types of employee leave, and each bucket may require its own policies in the company handbook,” says Beth Milito, senior executive counsel at the National Federation of Independent Business’s (NFIB) Legal Center. 

    When crafting employee leave policies, you should first check the employee leave laws in your state. Employee leave laws govern whether an employer must allow employees to take time off―either paid or unpaid―under a different number of circumstances, such as vacations, sick days, holidays, bereavement, and jury duty. Leave laws also address whether an employer must pay accrued leave to employees upon separation from employment.

     Vacation employee leave.

    Georgia Leave Laws

    In Georgia, vacations, sick days, holidays, bereavement, jury duty, and more are all governed by the state’s leave laws. Here’s what Georgia employers need to know about employee leave laws in their state.

    Vacation leave

    Vacations are nice to take every now and then, but that’s all they are: nice to have. In Georgia, employers are not required to provide employees with paid or unpaid vacation benefits.

    However, many small businesses offer paid time off to stay competitive in recruiting and retaining employees. According to NFIB, 73 percent of small businesses offer PTO to full-time employees. While the number of days offered is typically dependent on an employee’s length of service, the U.S. Bureau of Labor Statistics says many offer an average of 10 days for PTO each year.

    Should you decide to terminate a worker’s employment, or an employee decides to quit, it’s important to establish a clear policy regarding payment for any vacation time left on the table. In Georgia, employers need to establish policies either:

    • Requiring employees be paid for accrued vacation time.
    • Denying employees payment for accrued vacation time.
    • Disqualifying employees from payment of accrued vacation if they are terminated.
    • Disqualifying employees from payment of accrued vacation if they fail to comply with specific requirements, such as giving two weeks’ notice.

    Sick leave

    What happens if an employee feels under the weather? In Georgia, you aren’t required to offer paid or unpaid sick leave. However, like vacation time, many small businesses will offer employees time to recover from an illness. According to NFIB, 56 percent offer paid sick leave, with many offering a week or more.

    Bereavement

    Bereavement leave is time taken by an employee due to the death of another individual, usually a close relative. Georgia leave laws do not require employers to provide employees with bereavement leave or leave to attend funerals. However, NFIB says that nearly nine out of 10 companies offer bereavement leave.

    Holidays

    Small businesses in Georgia are not required to provide paid or unpaid holidays off. However, NFIB data shows that nearly 80 percent of small businesses offer paid time off for holidays. The typical paid holidays include:

    • New Year’s Day
    • Memorial Day
    • Easter
    • Independence Day
    • Labor Day
    • Thanksgiving Day
    • Christmas Day

    Jury duty

    Georgia law makes it illegal to discharge, discipline, or penalize an employee for taking leave for attending a judicial proceeding, including a subpoena, jury duty summons, or other court order. While Georgia doesn’t have any laws specifically requiring you to provide paid leave, the Attorney General is in favor of it.

    Voting leave

    On election days, Georgia leave laws require employers to provide up to two hours of leave for an employee to vote. However, the employee must give reasonable notice and the polls also can’t be open for at least two hours before or after the employee’s shift.

    Georgia business owners aren’t required to pay employees for voting leave. You can also determine the hours an employee may leave their shift to vote.

    Handling Employee Leave

    Leave laws vary by state, so it’s important for employers across the country to be informed when creating employee leave policies. Whether you own a business in Georgia or some other state, it’s important to make sure your employee handbook explains how your business handles employee leave. 

    As a Professional Employer Organization, GMS can help ensure your handbook is updated with the necessary laws and regulations to best protect your business. We’ll save you time and stress by managing key business functions like payroll, benefits administration, and other important services. 

    Contact our Georgia office or one of our many other locations today to talk to one of our experts about how we can help you make your business simpler, safer, and stronger.

  • The first wave of minimum wage increases hit New Jersey employers July 1 after state legislators reached the deal earlier in the year. However, business owners need to prepare themselves for more than just this initial wage boost. Here’s what New Jersey employers need to know about New Jersey’s plan to raise the minimum wage to $15 – and why business owners across the country should pay attention.

    A small business owner accounting for increasing minimum wage.

    Breaking Down New Jersey’s New Minimum Wage Deal

    As of July 1, 2019, the minimum wage in New Jersey is now $10 per hour, but it won’t stay there. The new minimum wage deal instituted regular intervals for wage increases. The current $10 rate is set to increase to $11 starting Jan. 1, 2020. From there, it will go up by $1 every subsequent Jan. 1 until capping out at $15 in 2024.

    That’s not necessarily the end of any potential minimum wage increases, however. After 2024, any additional increases are “tied to the consumer price index for all urban wage earners and clerical workers, or CPI-W,” per NorthJersey.com. These changes would go into effect Jan. 1 of every year after 2024.

    Of course, there’s more to the new deal than just one set of minimum wage rollouts. There are some exceptions where certain types of workers will follow an alternative rollout. These include the following groups:

    Seasonal workers or employees with five or fewer workers

    The minimum wage rate is drawn out for these groups compared to the normal rollout. These types of employees are still currently at $8.85 per hour and follow a modified timeline.

    • $10.30 – Jan. 1, 2020
    • $11.10 – Jan. 1, 2021
    • $11.90 – Jan. 1, 2022
    • $12.70 – Jan. 1, 2023
    • $13.50 – Jan. 1, 2024
    • $14.30 – Jan. 1, 2025
    • $15 – Jan. 1, 2026
    • CPI-W-based increases plus parity to make up any remaining difference between standard minimum wage

    Tipped workers

    The take-home pay for these workers follows the same structure as the normal minimum wage rollout, although the how they’re paid is different. Tipped employees must receive at least minimum wage through the combination of salary and tips. The new rollout updates the salary floor for these workers accordingly:

    • $2.63 – July 1, 2019
    • $3.13 – Jan. 1, 2020
    • $4.13 – Jan. 1, 2021
    • $5.13 – Jan. 1, 2022
    • CPI-W-based increases starting 2025

    Agricultural workers

    Unlike other groups, agricultural workers will cap out at $12.50 before being tied to CPI-W. Like seasonal employees, these workers are still at $8.85 and follow an adjusted timeline

    • $10.30 – Jan. 1, 2020
    • $10.90 – Jan. 1, 2022
    • $11.70 – Jan. 1, 2023
    • $12.50 – Jan. 1, 2024
    • Any further changes depend on future wage raises

    How Employees Can Prepare for Minimum Wage Increases

    When it comes to minimum wage, there’s not much you can do as a business owner except prepare your business for the future. The first step for this is to convert your payroll every time minimum wage increases. If you don’t, the state of New Jersey can dole out fines of up to $1,000 and an “administrative fee equal to not less than 10 percent or more than 25 percent of any payment due to employees.”

    You’ll also need to evaluate how the slate of minimum wage increases affect your employees and what it will do to your profitability. This can mean planning out price adjustments for products and services over the next several years to account for the set wage increases. Meanwhile, you can potentially use the new rates to find better employees if you have the financial wiggle room to do so. Offering a little more than minimum wage may make your business more attractive and give you more interested candidates. From there, you can choose the best employees if you struggle to find good talent.

    Prepare for the Future with Proper HR Management

    The new minimum wage deal is a big change for business owners in New Jersey. However, employers outside of the state should also take notice. New Jersey, along with California and New York, serve as a sort of testing ground for changes like this. If the minimum wage increases do well in New Jersey, other states may look to adopt similar increases as well.

    Whether you own a business in New Jersey or some other state, it’s important to make sure you keep up with current and future legislature. As a Professional Employer Organization, GMS not only helps you stay compliant, we can save you time and stress by managing key business functions like payroll, benefits administration, and other important services.

    Ready to prepare your business for the future? Contact our New York office or one of our many other locations today to talk to one of our experts about how we can help you make your business simpler, safer, and stronger.

  • When you’re thinking of starting a business, your passion is ultimately what drives you to provide the best product or service. The first thing that comes to your head is not about the technology you need for payroll, or how you are going to recruit top talent. Need an employee handbook? “I’ll type something up real quick.” 

    These are just a few of the many human resource topics you can easily put on the backburner without realizing the full scope of responsibilities you now carry as a business owner. As for the future of HR, it’s only getting more crucial for businesses to stay compliant with laws and stay protected.

    Two small business owners responsible for many HR functions, including payroll and taxes. 

    HR Responsibilities for New Business Owners

    The U.S. Small Business Administration puts the followings tasks under human resources:

    • Recruitment and hiring
    • Payroll and benefits
    • Employee retention and compensation
    • Laws and regulations

    Recruiting can be a difficult and frustrating process. Doing it the right way, the first time, will save you time and money to produce the best results down the line. This can result in hiring committed, talented, and loyal employees that will benefit your company and your bottom line. “Where do I even start,” you may ask. A job description and an employee handbook can get the ball rolling, but you must write both correctly to save yourself in the long run. According to HR Dive, 72 percent of hiring managers say they provide clear job descriptions, while only 36 percent of candidates agree.

    Once you have employees, you must have a system for payroll. Again, you may not know where to start. You know how much you want to pay your employees, but now you must log hours, file taxes, and keep up with your own finances. This is where retention and compensation come into play as well. Keeping up with workers’ compensation, healthcare, 401k, and all other benefits go hand in hand with retention and compensation. According to MetLife, 51 percent of employers say using health and wellness benefits to maintain employee loyalty and retain talent will become even more important in the next three to five years.

    Lastly, staying on top of laws and regulations can be overwhelming because of how often they change. Failing to put these new regulations into place can result in legal issues, which is why it is essential to stay on top of them. Dozens of new laws take effect yearly and as an owner, you are responsible for making sure your company is compliant. 

    Set Your Business up for HR Success

    Preparing for the future of HR can be simple with the right resources. Being able to embrace change, technology and the new workforce is essential. Now what can GMS do for you? GMS is a Professional Employer Organization that puts all of your HR responsibilities under one roof for your company. We have the HR experts who will keep your organization up to date with the latest regulations, making sure you and your workforce are protected. 

    GMS has you covered when it comes to areas like payroll, tax, human resources, risk management, benefits, and healthcare. We help you reduce costs, limit your business risk, and save time and money when it comes to HR administration. Contact GMS to see how we can help manage and benefit your organization!

  • It’s no surprise that it’ll take a lot of questions to determine whether a job candidate is the right fit for your company. However, you may not know that there are quite a few interview questions that can land your company in trouble. 

    One example of this is the city of Cincinnati’s new Salary Equity Ordinance, a measure that passed in 2019 and will take effect in March 2020. At that time, it will be illegal for employers in Cincinnati to ask about a job candidate’s pay history. This measure impacts any step of the hiring process, ranging from job ads to employee interviews.

    While Cincinnati employers must adjust to the Salary Equity Ordinance, there are many other types of questions that are disallowed from the interview process across the country. An illegal question can lead to a variety of consequences, including a discrimination lawsuit or an investigation by the U.S. Equal Employment Opportunity Commission (EEOC). This means you’ll want to brush up on which interview questions can lead to EEOC complaints.

    HR managers after asking an illegal job interview question. 

    Problematic Topics for Job Interviews

    Some illegal interview inquiries are clear – you shouldn’t ask questions about a job candidate’s race or sexual identity. While those two topics pose apparent discrimination problems, others dangerous questions are not as apparent. 

    Even questions asked with the best of intentions can be flagged as illegal. What you may see as an innocuous attempt at small talk can be interpreted as a topic that’s off limits. As a result, here are some topics that should be addressed carefully or avoided altogether.

    National origin and citizenship

    Any question regarding a candidates’ national origin can be an issue. The Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for employers to base hiring decisions on a person’s citizenship or immigration status. Even a question asking about a candidate’s accent can be misconstrued as an attempt at discrimination. However, it’s acceptable to ask whether a candidate can legally work in the U.S., provide the required documentation if hired, and read, write, and speak English if required by the job.

    Religion

    If a question involves a candidate’s potential religion, you should probably leave it unsaid. Even roundabout questions like whether a candidate will need time off for religious holidays can be seen as non-job related and an attempt to discriminate against a person for his or her beliefs. According to the Yale Center for International and Professional Experience, the only employers allowed use religious affiliation as a basis for hiring are those “whose purpose and character is primarily religious.”

    Pregnancy status

    It’s not acceptable to ask about their pregnancy – even if the person interviewed is clearly pregnant. Not only does this violate set pregnancy discrimination laws, it can also potentially appear as gender discrimination since male candidates won’t have to answer the same questions. General questions about any future planned leave is acceptable if the question isn’t tied to the pregnancy. Also, feel free to ask other neutral job-related questions involving certain work responsibilities to see if the candidate can perform necessary tasks.

    Marital status or number of children

    Like pregnancy, you aren’t permitted to ask job candidates whether they’re married or have any children. Asking about these may lead an employer to discriminate against a candidate because they may need some time to take care of their current or future children. Instead, ask about specific job-related responsibilities to see if they can perform these tasks, such as travel requirements or set work hours.

    Disability

    The Americans with Disabilities Act (ADA) makes it illegal for employers to ask a range of questions that “are likely to reveal the existence of a disability before making a job offer.” That means any questions regarding how many sick days an applicant took in the past year or what drugs they take.

    It’s also generally disallowed to ask if an applicant will need a reasonable accommodation for a job unless “the employer knows that an applicant has a disability, and it is reasonable to question whether the disability might pose difficulties for the individual in performing a specific job task” For example, the EEOC writes that it’s fine to ask about reasonable accommodation if the applicant voluntarily revealed his or her disability or there’s a clear visual sign, such as if the applicant uses a cane for a severe limp.

    Age or genetic information

    It’s only acceptable to ask about an applicant’s age if it’s directly tied to their job. For example, someone who works at a bar or some other age 21-plus environment will need to provide proof of their age. Even a question like when an applicant graduated from high school can be viewed as an attempt to identify a person’s age.

    Arrest record

    According to the EEOC, there is no federal law preventing employers from asking candidates about their criminal history – although “Using criminal history information to make employment decisions may violate Title VII of the Civil Rights Act of 1964.” It’s important to note that while there’s no federal law against asking about arrest records, many states ban the practice. As such, make sure to check your state’s laws before asking candidates about their criminal history.

    Protect Your Company During the Hiring Process

    Adding a new employee is an exciting step for any business, but it’s important to make sure that your business proceed with caution. Fortunately, there are many steps that you can take to avoid illegal interview questions. These include:

    • Establishing set interview questions for every candidate
    • Treat every candidate the same during the interview process
    • Take notes and document the results
    • Have more than one interviewer in the room

    Another way to help your business is to hire a Professional Employer Organization that can not only oversee employee hiring and training, but also help you shoulder the administrative burden created by key HR functions. The GMS team can help you stay up to date on the latest rules and regulations while managing everything from your company’s payroll to employee benefits plans.

    Whether you need HR services in Cincinnati or in some other location, GMS can help. Contact us today to talk to one of our experts about what we can do to help you protect your company now and prepare for the future.

  • With recent changes to the Fair Labor Standards Act (FLSA), many business owners – and their employees – are trying to figure out exactly who qualifies as exempt from overtime pay under the new rules. Unless you’re ready to dig into Department of Labor (DOL) fact sheets and other documents, it’s not always clear just what counts as white collar exemption these days. To help, we’ve put together a breakdown of these exemptions to help you properly classify your employees.

    A group of white collar exempt employees at a business.

    What Qualifies White Collar Employees to be Exempt?

    There are three tests that employees must pass in order to classify them as exempt.

    • The salary basis test – Exempt employees must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed
    • The salary level test – Exempt employees must meet the threshold for minimum weekly salary
    • The duties test – Exempt employees must primarily perform a list of set duties

    The thresholds for the salary level changed as of Jan. 1, 2020. In the past, the minimum salary threshold was $455 per week. The recent rule changes officially raised the threshold to $684 per week. That equates to a $35,568 annual salary, 10 percent of which can come via nondiscretionary bonuses, incentives, and commissions that are paid out each year or more frequently. 

    There are also separate stipulations for “highly compensated employees” (HCE). The salary threshold for this group raised from $100,000 to $107,432 per year. Unlike other employees classified as exempt, HCEs face a “relaxed” duties test according to the Society for Human Resources Management (SHRM).

    The Different Exempt Employee Classifications

    While the salary thresholds have changed, the employee classifications listed as exempt have not. These classifications are not based on job titles. Instead, certain types of duties are used to mark an employee for exemption. The DOL lists the following groups as exempt, each with their own duties tests.

    • Executive
    • Administrative
    • Professional
    • Computer
    • Outside sales

    Executive Exemption

    To be considered an executive employee, a person must manage an enterprise, or a recognized department or subdivision of that enterprise, as his or her primary duty. This definition also states that an executive employee must regularly oversee and direct at least two or more full-time employees (or the equivalent in part-time employees). In addition, this employee must have some influence on hiring or firing other employees, whether he or she can outright terminate employees or can influence decisions related to any other type of status change for other employees. There is also a stipulation that any employees who are actively engaged in management and own at least 20 percent equity interest in the enterprise in their place of employment are considered exempt.

    Administrative Exemption

    Administrative employees are judged by a pair of tests. First, the employee must primarily perform office or non-manual work that is directly related to management or general business operations. Second, administrative employees must “exercise of discretion and independent judgment with respect to matters of significance” which refers to the level of importance or consequence of their primary duties. This discretion and judgment implies that an administrative employee evaluates various courses of action and has authority to decide which is best for the business.

    Professional Exemption

    The DOL has guidelines for two different types of exempt professional employees: learned professionals and creative professionals. Learned professionals must primarily perform work that requires “advanced knowledge.” This knowledge involves work that requires consistent discretion and judgment and must be “predominantly intellectual in character.” The DOL also stipulates that this knowledge be in a field of science or learning. As for creative professionals, their primary work should require a form of invention, imagination, originality, or talent in a recognized artistic or creative field.

    Computer Exemption

    Employees classified under the computer exemption are those employed as a systems analyst, programmer, software engineer, or some other type of skilled individual who operates in the computer field (not including manufacturing or repair). The DOL also stipulates that these employees’ primary duties involve one or more of the following tasks.

    • The application of systems analysis techniques and procedures to determine hardware, software, or system functional specifications
    • The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes based on and related to user or system design specifications
    • The design, documentation, testing, creation, or modification of computer programs related to machine operating systems

    Outside Sales Exemption

    Unlike the other classifications, the FLSA’s salary requirements do not apply to outside sales employees. To be considered part of this exemption, an employee’s primary duty must involve either making sales or obtaining orders/contracts for either services or for the use of facilities. In addition, an outside sales exempt employee must regularly work outside of his or her employers place(s) of business.

    Why is it So Important to Correctly Classify Exempt Employees?

    Employee misclassification can lead to a series of issues. Not only can misclassification impact the compensation for certain employees, it can also affect benefit plan eligibility, payroll taxes, and other crucial details. Not only can these mistakes be a huge issue for your employees – Joe Schmo from the warehouse won’t be thrilled if he’s classified as exempt – you’re putting your business at risk with the law as well.

    There are serious financial consequences if the Bureau of Workers’ Compensation (BWC) finds out that you’ve misclassified employees. There are a variety of potential penalties you can face depending on the severity of the situation:

    • The collection of unpaid wages
    • Back taxes
    • Additional penalties for failing to deduct and withhold taxes for misclassified employees
    • Punitive damages from lawsuits for unpaid wages and taxes

    In addition to the initial penalties, you can bet that you’ll end up on the BWC’s radar. Businesses that misclassify employees are known as potential repeat offenders, which means that these penalties will make it more likely for the Department of Labor and OSHA to audit your business in the future, even if the initial misclassification was the result of a simple mistake.

    Protect Your Business from Misclassification Mistakes

    Proper employee classification is very important, but it’s not necessarily easy to make the right call for every employee if you haven’t spent the time necessary to learn all the appropriate classifications. Meanwhile, you still have a business to run even after you’re done trying to figure out tedious HR management tasks.

    While you may not have extensive HR expertise, the experts at GMS do. In addition to helping you avoid costly misclassification issues, we can help you simplify and strengthen your business through payroll management, employee benefits administration, and other crucial tasks. Contact GMS today to talk to us about how we can help you save precious time and protect your business through professional HR management.

  • It is no surprise, that many companies are currently hiring. With unemployment being at an all-time low, many employers are having a hard time finding quality employees.

    One industry that has faced scary headlines is the transportation industry. With the growth of self-driving technology, transportation companies, such as Atlanta-based UPS, one might think that the transportation industry would be hiring at a lower rate or possibly consider laying people off. This happens to be far from the truth. In fact, the transport sector is showing surprising growth.

    A line of trucks being driven by people hired into the transportation industry.

    The Numbers Behind Transportation’s Hiring Boom

    The U.S. Bureau of Labor Statistics reported that 16,000 workers were added in September to companies specializing in air freight, trucking, and warehouse operations. This makes transportation one of six top job magnets, alongside others such as tech and healthcare.

    The data doesn’t stop there either. According to a LinkedIn study, the transportation industry hasn’t just added driving jobs over the past five years, more than 50 percent of new jobs added are higher-paid specialized functions. This goes to show that the industry is showing no signs of slowing down anytime soon. With these added specialized jobs, this means more opportunities for salespeople.

    Another development worth mentioning is that jobs in the traditionally male-dominated field are now opening up to women as well. Women make up about 15 percent of the industry average, but at XPO Logistics, women now make up about a quarter of their global workforce. This year alone, 30 percent of new employees in transportation happen to be female.

    So which cities are benefiting the most from the surge? LinkedIn data shows that the majority of cities tend to be heartland U.S. metropolitan areas. The top five cities are Chicago, New York City, Dallas-Fort Worth, Atlanta, and Los Angeles.

    The Impact of the Hiring Trend on Transportation Businesses

    What does this mean for business owners? Growth. Employers are not only hiring new employees, but also hiring new employees for jobs that the company has not had in the past. An example of this can be seen in UPS where in the past they have only had one way to do returns. With “Returns-Plus” and other options they can offer to big customers, UPS now must hire for new positions. When the economy experiences rapid growth, it is imperative for businesses to keep up. Many employers will be hiring and looking for some of the best talent.

    For companies in this industry struggling to find quality talent, there are resources available to help you  with employee recruitment and hiring. When you partner with a PEO like GMS, we can help you navigate through the hiring process, along with the rest of your administrative burdens from payroll to human resources, and benefits. GMS stands with employers through their employees’ entire lifecycle. From helping companies search for talent to the interview process to setting up the employee’s benefits, GMS will be there. Business owners, your time is precious, so handing off these functions will allow you to focus on what really matters.

    Ready to make your business simpler, safer, and stronger? Contact our Atlanta office or one of our other locations today to talk with one of our experts about how we can help you with hiring and other key business functions.

  • Employees play a massive part in the success of your company. Of course, this also means that a bad employee can also lead to potential inefficiencies and other issues. 

    Firing an employee is a difficult reality of running a business. While the situation is unpleasant for everyone involved, there are right and wrong ways to go about the termination process. In fact, there are several steps you need to take before, during, and after you fire an employee. Here’s what you need to know to take the right route during the termination process.

    An employee gathering items after being fired by a small business owner. 

    What to Do Before You Fire an Employee

    Firing an employee is typically more than a one-day process. There are several actions you’ll need to take before you effectively terminate an employee to help protect your business and provide proper feedback. Depending on the employee, some of these steps may even help you improve their performance and save you from severing the relationship.

    Distribute an employee handbook

    Long before you plan to fire someone, you should make sure that every one of your employees receives an employee handbook. An updated handbook is an official document that makes the following details very clear for your employees:

    • Company philosophy
    • Conditions of employment
    • Company policies and procedures
    • Compensation and benefits

    Your employee handbook plays an important dual role for your business. First, it’s a great way for new hires to learn more about the rules, perks, and personality of your business. Second, it’s a compliance tool to make sure that your employees know and understand internal policies and grounds for dismissal. Having these rules in place – along with documentation that your employees have received your handbook – will help protect your business in case a fired employee tries to fight their dismissal in court.

    Review past performance reviews and feedback

    Before you decide to dismiss an employee, look back to see what type of feedback he or she has received in past reviews. If your employee has only heard good feedback and received raises that correspond with exemplary performance, a dismissal would come as a huge shock. 

    Not only do employee performance reviews give you a chance to set goals and expectations for an employee, they can also help protect you against claims if you’ve shared feedback indicating that an employee needed to improve. If there are no negative reviews on record, you may want to wait until you can provide some honest feedback. This way your employee may take the review as an opportunity to improve. If he or she doesn’t, you have evidence that both you and your employee knew of the continued poor performance so that you can back up your decision to terminate an employee.

    Document violations and give official warnings

    Like performance reviews, it’s important to have a documented history of any warnings or violations for any employee you decide to fire. Once it has become apparent that an employee’s performance is simply not up to standards, call them into a private space and give that person an official warning.

    It’s important to make sure that this warning is also in writing. While you explain why you’re unhappy with your employee’s performance, there should also be a printed document that the employee can sign so that you can place it in that person’s personnel file. You can also use a performance improvement plan that lists set goals for an employee to achieve within a set period of time (30 days, 90 days, etc.). Either of these options will make it clear exactly why the employee is at risk of losing his or her job and will help you back up your case as to why they needed to be dismissed.

    What to Do On the Day of Termination

    After you’ve taken the appropriate steps to give an employee an opportunity to improve and document reasons for dismissal, it’s time to act quickly and terminate the offending team member.

    Don’t wait for Friday

    While some situations call for immediate dismissals regardless of the day, certain days can be better than others if you can plan ahead. According to The Balance Careers, it’s generally best to try and aim for sometime in the middle of the week to fire an employee, preferably on a Tuesday or Wednesday. 

    Firing someone on a Monday can lead to the terminated employee feeling as though you wasted his or her time waiting until a new week has started. Friday dismissals leave the terminated employee to stew about the decision over the weekend. Aiming for the middle of the week can help mitigate bad feelings in an already difficult situation.

    Fire employees in person

    Firing an employee is already an unpleasant situation – don’t make it worse for the employee by terminating them via phone, email, or some other electronic means. While the experience will likely always be painful, it’s important to be as humane as possible when firing an employee. That approach means giving them the courtesy of hearing the news from you or another appropriate person at your company. 

    Not only is a face-to-face firing the right thing to do, it also looks much better than the alternative. Taking a less personal approach can leave a negative impression for other employees when they learn about the dismissal, especially if someone was friends with the terminated employee. As such, a personal approach can lessen the odds of not only bad reactions from terminated employees, but also any concerns from the coworkers they left behind.

    However, an in-person approach isn’t necessarily feasible if you need to fire a remote employee. While you may not be able to sit in the same room with these people, it’s still good to break the news face-to-face through some form of video conferencing platform.

    Don’t fire employees by yourself

    It’s always a good idea to have another person in the room if at all possible. Whether it’s an HR specialist or another employee, a second person serves as a witness. Unfortunately, there’s a chance that your former employee may try and accuse you of an unjust firing. Having an HR professional in the room can help you stay on track during the dismissal process to avoid any potential issues. Even if you don’t have an HR expert available, a second person gives you another person who can attest to your side of the story in case the former employee makes any false claims during your meeting. 

    Keep it short and simple

    When it’s time to fire someone, it’s best to avoid any small talk and get straight to the point. Tell the person directly that he or she has been terminated. Make it very clear that this decision is final and give very specific feedback as to why you and the company made this decision. 

    As you may expect, this isn’t a happy occasion and the fired individual likely won’t take the news well. However, it’s important to listen to what your former employee has to say to get a better read on how he or she takes the news. Whether they’re angry, sad, shocked, or in denial, continue to repeat the message and treat them with respect.

    This is also the time to cover next steps and what will happen involving their final pay, benefits, and other details. At this point, you’ll be able to discuss any terms for severance pay, extended healthcare, or other benefits if you choose to offer them. You can also ask the individual to sign a release of liability.

    Collect any work-related items

    Depending on your business, you may have provided your former employee with equipment ranging from small supplies to extremely expensive items. You’ll want to collect any company property from them before or during the individual’s last day, unless there’s an agreement in place to allow that person to keep certain goods. These items can include:

    • Keys or key cards
    • Laptops
    • Credit card
    • Cell phone, tablet, or other mobile device
    • Company car
    • Miscellaneous office equipment

    In addition to physical items, you also need to address passwords, codes, or any other means of company access. If certain doors at your company are unlocked by keycodes or other card or keyless means, change those codes. Likewise, either you or someone else at your company should restrict any user access and change any passwords the dismissed employee may use to access your computer network.

    Likewise, your former employee likely has some personal items that he or she will want to take home as well. If you schedule the termination meeting for the end of the day when most of your other employees are gone, the dismissed employee can gather their own possessions without as much fear of embarrassment. Of course, you may want someone there to watch just to ensure that the  employee doesn’t take any company property. You can also ask terminated employees to provide a list of their personal property so that someone else can gather their possessions and return it to them there or someplace outside of work at an arranged time in the future.

    Escort them out and end on civil terms 

    After both parties have collected all the necessary items and are ready to go, it’s time to wrap up the termination meeting. Personally walk the individual to the exit and wish him or her well in the future. The dismissed individual may not be in the best mood, but it’s good to part ways on a gracious note.

    What to Do After You’ve Fired an Employee

    While the hardest part of the termination process may be over, your job isn’t quite done. There are still some very important tasks to finish that involve updating everyone else in your team and protecting yourself in case the fired employee decides that the matter isn’t over just yet.

    Inform the office

    While it may seem easier to not address the departure of an employee, it’s best to be honest to your team. If you don’t say anything, other employees may lose trust in management and start to fear that there are more dismissals in store for the future. Word will quickly spread on it’s own, so you can shape the conversation and get ahead of the gossip with a quick message.

    Fortunately, your message to the rest of your company doesn’t need to be long and complicated. Instead simply you’ll want to focus on the following:

    • That the dismissed employee no longer works at your company
    • The transition plan for handling the former employee’s departure
    • That anyone with questions should feel free to speak to you or another relevant person

    Avoid saying that the employee was fired. It’s best to just say that the person in question is no longer at the company and shift toward the future. Also, refrain from making any critiques about the former employee. These comments may not sit well for his or her former coworkers, so it’s best to move forward.

    It’s also important to determine the right method and timing for sharing this information. If you have a smaller company or the former employee workerd with a close group of associates, an in-person company meeting is best. If your company is larger or the former employee didn’t work as closely with others, a termination email should be enough to suffice. You can also hold an in-person meeting with closer associates and follow up with an company-wide email as well if you want to break the news to a certain group first.

    Reassign duties

    Part of the transition plan for handling your former employee’s departure involves addressing how that employee’s duties will be handled in the short- and long-term future. This can involve delegating who will pick up the slack until you have a more permanent solution in place. If the employee received regular emails or calls from clients or customers, have those messages forwarded to someone else in the organization.

    You also want to be careful about how you split up these duties – you don’t want to make a good worker bitter because she or she has to do the work of two people because of someone else’s dismissal. If you plan to hire someone new or put new processes in place to ease the overall burden of these duties, let your employees know. A bit of transparency will help reassure concerned employees and let them look ahead to the future instead of dwelling on the downsides of the dismissal.

    Be prepared for unemployment claims

    If the employee didn’t sign some form of liability preventing them from doing so, there’s always a chance that they may file a claim against your business. Unemployment taxes can cost your business thousands of dollars, and a claim against your company may lead to even more financial burden. 

    Fortunately, there are ways to protect your business from the claims and unruly taxes. A combination of maintaining good company policies and record keeping can improve your chances of winning unemployment claim cases. It also helps to have a dedicated company like a Professional Employer Organization on your side that can reduce your tax risks and help you fight against unwarranted claims.

    Consider a PEO for Employee Performance and Risk Management

    The firing process isn’t an enjoyable one, but it helps to have trustworthy, experience HR professionals by your side when you do need to dismiss an employee. Group Management Services can help you manage the entirety of the employee lifecycle, including employee recruiting and training, performance management, and unemployment claims management.

    Whether you’re dealing with employees, benefits, or payroll, HR management can eat up the majority of your schedule. GMS can help you take your time back while providing your business with professional services that protect and strengthen your business. Contact GMS today to talk to one of our experts about how we can help you support your business.