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  • Whether your business is facing a difficult financial situation or hit a slow season, it may seem like layoffs are your only option. However, there is another way that you can reduce payroll costs without completely cutting jobs: furloughs. 

    Furloughs are a cost-saving measure that can provide employers with financial flexibility without completely severing ties with employees. Of course, you’ll need to ask yourself a few questions to figure out if furloughs make sense for your business. 

    An empty workplace after a business furloughed its employees. 

    What is a Furlough and How is it Different Than Laying Someone Off?

    In short, a furlough is time off without pay. Unlike an employee who is laid off, people who are furloughed are still technically employed by your company. Instead of completely severing ties with employees, furloughs allow you to temporarily part with workers and send them home without pay. Once the furlough is over, the affected employees can return to work and resume their normal duties.

    During this time, furloughed employees cannot do any work on behalf of their employer – even a short phone call or a half-hour of work is considered a violation of the no-work rule. As such, even small tasks can result in you having to pay furloughed employees for their time (or the whole day for exempt workers).

    How Long Do Furloughs Last?

    The length of the furlough can be as short or long as you need. That means that furloughs could range anywhere from a week to several months. Indefinite furloughs are also an option if you’re unsure of how long you’ll need to maintain a lower payroll. If you plan to furlough employees, you’ll want to find a balance between the needs of your business and an amount of time that won’t drive your valued employees to find employment elsewhere.

    How Do Furloughs Affect Hourly vs. Salaried Employees?

    Employers have the right to impose furloughs on both exempt and nonexempt employees, although there are some key differences in terms of cost savings. With hourly employees, you can calculate the total number of hours saved with a furlough and evaluate savings. You can also furlough salaried employees, as these workers are only entitled to pay during weeks in which they work. As such, a long-term furlough won’t change their exemption status. 

    How Do Furloughs Impact Employee Benefits?

    While your employees won’t be paid during a furlough, they are still technically employed by your company. As such, there is some expectation that these employers are entitled to group health coverage, retirement plans, and other such benefits offered by your business. 

    Despite this expectation, you still may have the option to discontinue or reduce the benefits of furloughed employees. However, you’ll want to communicate this with your employees ahead of this decision. Of course, you’ll also need to check your state’s employment laws to see if there are any stipulations about the treatment of employee benefits during furloughs. The Society for Human Resource Management (SHRM) suggests considering the following points:

    • Your group health plan may dictate if coverage continues or ends during a furlough. Certain plans extend active coverage during short-term leaves of absence, while others set minimum hour requirements.
    • You typically must offer affordable COBRA continuation coverage for all group health plans if coverage ends because of termination or a reduction in hours. Also, an increase in the employee’s share of the premium because of the furlough is a loss of coverage for this purpose.
    • Terminating group health plan coverage for furloughed employees may lead to ACA penalties.
    • Covered employees must still pay monthly premiums/contributions to maintain coverage during a furlough. Make arrangements with employees in advance of the furlough to avoid lapses in coverage or invalidated plans. Payment arrangements for allowable coverage should be made in advance with employees and can include payments via mail, ACH, or a COBRA vendor.
    • Evaluate 401(k) and other retirement plan implications. For example, a furlough may trigger a “partial termination” clause, which may lead to 100 percent vesting for affected participants.

    Can Furloughed Employees Get Unemployment?

    While furloughed employees are still technically employed by your company, they will still typically qualify for unemployment benefits. In fact, the CARES Act expanded unemployment benefits for furloughed employees. According to CNBC, these employees are now “eligible to receive their state-administered benefit, based on previous earnings, for up to 39 weeks.”

    Can Furloughed Employees Work Elsewhere?

    Yes, furloughed employees can find alternative employment. In addition, certain states allow furloughed workers to pick up part-time jobs and stay eligible for partial unemployment.

    Determine the Right Path for Your Business

    Furloughs or layoffs are never an easy decision, but it’s important to decide the right route for your business. Need an HR partner to help you plan ahead and stay compliant with local, state, and federal regulations? Contact GMS today to talk to one of our experts about the future of your business.

  • Over the past few years, a growing number of states and cities have banned the practice of using salary history to screen potential new employees. If you’re an employer in New Jersey, you’re now included in that trend. 

    Starting in 2020, it’s not a good idea for New Jersey employers to ask job applicants how much they made. The Garden State is now one of 17 states and multiple cities to outlaw pay history questions. While similar in many aspects, New Jersey’s version of the law does have some key differences that can help employers avoid potential penalties.

    A New Jersey employer asking for salary history, which is now banned in the state. 

    The Impacts of New Jersey’s Salary History Ban

    As with other states with salary history bans in place, Bill A1094 prohibits New Jersey employers from using past wages, benefits, and other salary history-related information to vet potential job applicants. The law also prevents employers from requiring an applicant’s salary history to satisfy any minimum or maximum criteria.

    If by chance an employer breaks the rules set in Bill A1094, the law has set penalties in place. Any employers who violate salary history ban are subject to civil penalties. These penalties scale based on the number of times an employer breaks the rules:

    • Up to $1,000 for the first violation
    • $5,000 for the second violation
    • $10,000 for each subsequent violation

    Exceptions

    Unlike other state and city bans on salary history inquiries, there are a few exceptions where employers are protected in New Jersey. The state’s ban includes a couple of examples of expressly permitted activities where the employer would not be in violation of the law.

    Voluntary release

    The law does not penalize employers if applicants voluntarily provide their salary history. Of course, this disclosure must be done by an applicant’s choice alone – it cannot be prompted or coerced at all. If this information is provided, the employer may then verify that the information provided is accurate and use it to determine compensation.

    Post-offer requests

    If an employer makes an offer of employment to an applicant that includes an explanation of the overall compensation package, the employer may request that the applicant provide a written authorization to confirm their salary history. If the authorization is given, this information can include both compensation and benefits.

    Hiring internal or past employees

    The law does not extend to any internal applicants with regards to promotions or transfers. As such, employers may consider salary information for applicants who already work at their company. In addition, employers may consider past salary history information if an applicant used to work for them, but only the information that they already have on file.

    Federal law exclusions

    If a federal law requires an applicant to disclose their salary history (or requires an employer to verify that history), an employer will not be penalized for collecting and using that information.

    Incentive or commission plans

    If an applicant is applying for a position with commission or incentive-based compensation components, an employer may inquire about past incentive and commission terms. However, these inquiries cannot extend to what the applicant’s earnings were under a previous employer’s plans.

    Collective bargaining agreements

    Employers may communicate with applicants about wages or salary rates if the job has certain salary guidelines set by collective bargaining agreements or laws.

    Evaluate Your Hiring Process to Protect Your Business

    While the salary history ban is a more recent law, it’s not the only regulation that employers need to consider during the hiring process. There are a variety of illegal interview questions that are off-limits for employers, such as inquiries about national origin and pregnancy status. As such, it’s important for employers to take the following steps to examine their internal processes to prevent possible violations.

    • Evaluate job applications, recruiter instructions, and background-check instructions to eliminate improper information requests
    • Examine interview templates or guidelines (and establish them if they do not already exist)
    • Treat every candidate the same during the interview process
    • Have more than one interviewer in the room and take notes to document the results

    Need an HR partner to prepare your business for new laws and other business administration headaches? Contact GMS’s New Jersey office or one of our other locations today to talk to one of our HR experts.

  • As a business owner, you want your employees to come into work with enthusiasm and motivation to take on the day. After all, employee engagement can be very beneficial to a business in a number of ways. Yet, it’s not often that companies prioritize it. According to Gallup’s State of the American Workforce Report, only one in three employees are engaged at work. Below, we shared some ideas to improve employee engagement within your small business as well as a few key benefits.

     A group of coworkers are enjoying a pizza together at the office during lunch.

    Why is Employee Engagement Important?

    Employee engagement equates to more than just workplace happiness. According to Willis Towers Watson, employee engagement is an “employee’s willingness and ability to contribute to company success.” By this definition, high employee engagement can mean significant growth for your business. Specifically, here are a few key benefits that high engagement can bring:

    • Increased productivity. Engaged employees have the ability and motivation to outperform those who are disengaged. According to Gallup, highly engaged workforces were 17 percent more productive than those with less engagement. 
    • Greater profitability. Inc magazine reports that increasing employee engagement investments by 10 percent can increase profits by $2,400 per employee per year.
    • Improved retention. Employees who are invested in their employers won’t want to look elsewhere for work. The same Gallup report found that companies reduced employee turnover by 90 percent when engagement increased.
    • Better customer service. A business’s employee experience can directly impact customer experience. According to research by Temkin Group, companies whose customer experience is significantly better than their competitors have more engaged employees.
    • Reduced absenteeism. Low job motivation can cause employees not to show up for work. Gallup also found that companies were indicated to experience 37 percent less absenteeism as a result of increased employee engagement.

    How to Improve Employee Engagement

    Considering the many benefits that high employee engagement can provide, there are many different approaches you can take to improve engagement within your organization. According to an article by The New York Times, employees are more engaged when four of their core needs are addressed:

    • Physical – when employees can renew and recharge at work.
    • Emotional – when employees feel valued and appreciated for their contributions.
    • Mental – when employees have the time to focus on their most important tasks and define when and where they accomplish their work.
    • Spiritual – when employees can do more of what they do best and enjoy most.

    With these core needs in mind, here are some cost-effective ideas to improve employee engagement within your small business.

    Lunch and Learn

    Consider this an upgrade from your typical meeting. As the name suggests, lunch and learn sessions are casual training or informational meetings hosted by a fellow employee during lunchtime. During a lunch and learn, an employee shares a short presentation on a business-related topic, such as how to use marketing automation software or a case study on an exceptional project they worked on. Participants bring their lunches, listen in, and ask questions while enjoying their lunch. Lunch and learn sessions are a great way for your employees to learn about different sides of your business and the types of projects their colleagues are working on.

    Innovation Days

    Innovation days can be a day, or a half day, where employees are allowed to use company hours to work on special projects that matter to them. It allows employees to be creative, learn new things, and try new ideas, and they will certainly appreciate you for that. As a result of setting aside time dedicated to innovation, your employees may uncover ways to reduce costs, streamline processes, and make your business even stronger.

    Team Outings

    Company culture is an important aspect of any employee’s life. According to Glassdoor, 58 percent of workers say that company culture is more important than salary when it comes to job satisfaction. Hosting work outings can make your employees want to stay for who you are and what you do, and not for just a paycheck. Consider creating a culture committee focused on planning regular team outings and office activities, such as team lunches, happy hours, picnics, sporting events, and volunteer opportunities.

    Work Clubs

    Shared hobbies can certainly bring people together. Consider creating work clubs, such as fantasy football leagues, running clubs, softball teams, and book clubs, for likeminded employees. Clubs can be a great way to change the conversation from work to personal life and can serve as a prime environment for co-workers to develop camaraderie. According to the Society for Human Resources Management (SHRM), the more friends an employee has at work, the more likely they are to reject another job offer.

    Wellness Programs

    For employees to be engaged on the job, mental and physical health can play a significant role. That’s where implementing a workplace wellness program can help. Consider wellness programs beyond smoking cessation and drug and alcohol abuse prevention. Additional workplace wellness activities could be stress management and workout sessions. Wellness challenges, such as a step count challenge or water drinking challenge, can also be a great way to add some friendly competition into the mix.

    Performance Reviews

    Providing regular feedback is crucial to keeping employees engaged. Research shows the value of feedback: four out of 10 workers become disengaged when they receive little to no feedback, 82 percent of employees appreciate feedback, and 43 percent of highly engaged employees receive feedback at least once a week. 

    Regular check-ins―whether weekly, monthly, or quarterly―allow management to acknowledge an employee’s efforts and discuss opportunities for development and growth. These discussions can help employees feel more connected to the business, as they will gain a better understanding of the individual role they play in meeting your business goals and develop a sense of purpose that will keep them engaged on the job. 

    Training and Mentorship Programs

    Employee training shouldn’t end after onboarding is complete. For your employees to stay engaged, it’s important not to let them fall into a rut. Without opportunities to develop and learn professionally, employees are more likely to lose motivation and start to look elsewhere for work. According to a Korn Ferry survey, the majority of those changing jobs said boredom and the need for new challenges were the top reasons they were leaving. 

    Employee training programs can be an effective way to not only teach new employees but also develop existing workers’ skillsets. Additionally, mentorship programs can serve as a great way to help young employees grow within your organization.

    Regular Breaks

    Regular breaks offer employees time to reset and refocus. The New York Times reports that employees who take a break every 90 minutes experience a 30 percent higher level of focus than those who don’t, as well as a 50 percent higher ability to think creatively. A survey by Staples echoes these findings, with 80 percent of respondents saying that breaks make them feel more productive. As these findings show, when breaks are encouraged, employees feel like they can have better work-life balance, which can lead to greater engagement.

    Employee Recognition Programs

    Research has found that employees not only want but expect to be recognized when they do good work. As a result, Glassdoor found that more than 80 percent of employees are motivated to work harder when shown appreciation. Employee recognition programs are a great way to accomplish that. Consider building recognition programs that are aligned with your purpose, values, and goals as a way to show appreciation, encourage positive behavior, and keep engagement levels high.

    Need more employee engagement ideas? Contact GMS today to learn how our employee performance management services can help.

  • Addressing common questions and concerns from clients and employees impacted by the coronavirus.

    Group Management Services Inc., a Certified Professional Employer Organization based in Richfield, Ohio, assures clients access to the same level of support and resources throughout the Coronavirus pandemic.  

    “Our number one priority is getting employees paid and maintaining benefits for those employees,” GMS President Mike Kahoe said. “As such, we are offering our customers grace period on all benefits, state unemployment, and workers’ comp billings.”

    GMS wants to address all concerns, starting with the list of common questions we anticipate from our clients and employees.

    GMS Operations

    Q: How will GMS employees be able to continue to work to ensure that my employees get paid during this crisis? 

    A: GMS has taken the precaution of instituting a company-wide work-from-home policy. In fact, a large percentage of our company already works from remote locations several days per week. This gives us a great deal of confidence in our ability to support you without disruption. Additionally, all GMS employees have access to all GMS systems, including phones and video conferencing, from wherever they work, and these systems are built on highly redundant platforms. 

    Technology

    Q: How is GMS protecting my data during this crisis? Aren’t allowances being made that could reduce the cyber protections in place to allow your employees to work from home?

    A: GMS has invested in cyber security improvements over the last 18 months that are effective at protecting our Clients’ data regardless of where you, or our staff, interact with it. All these safeguards remain in place, and we will maintain a high level of vigilance to ensure that your data and your employees’ payroll is secure. 

    Health Insurance

    Q: Will my GMS plan pay for the COVID-19 testing (Codes U0001 and U0002)?

    A: Yes. GMS will waive member cost share for these tests when administered by in-network providers in accordance with the CDC guidelines.

    Q: Will my GMS plan cover the treatment for COVID-19?

    A: Yes. Treatment for COVID-19 is eligible under the normal provisions of the plan when following CDC guidelines.

    Q: If I lay off part of my workforce in response to the COVID-19 crisis, can the company continue to cover those employees?

    A: Yes. As long as you continue to pay premiums, you may continue to cover laid-off employees even though they are not actively at work. Please note that you must administer the plan on a uniform, non-discriminatory basis. In other words, you may not choose to pay premiums for only certain people.

    Q: If I have to lay off my entire workforce in response to the COVID-19 crisis, can the company continue to cover those employees?

    A: Yes, as long as one person remains actively employed by the group. If you continue to pay premiums, you may continue to cover laid-off employees even though they are not actively at work. Again, this must be administered on a uniform, non-discriminatory basis.

    Q: What about continuation of coverage?

    A: As long as one person remains actively employed, employees may be offered COBRA and may elect to continue coverage under COBRA under the normal notice and election procedure.

    * If the plan has no active employees, the plan is terminated and COBRA is not an option. In that case, employees would have a special enrollment period to enroll in individual coverage or could purchase a short-term plan that is subject to medical underwriting.

    Q: If I have to terminate coverage for my employees in the middle of a month, will I receive a refund of my premium for the rest of the month?

    A: While your contract states that GMS will not refund a partial month’s premium, we will refund the proportional amount of premium should you terminate your coverage before the end of the month given the gravity of the current situation.

    Q: In light of the COVID-19 crisis, can I get a grace period extension on paying my premium?

    A: Yes. GMS is offering to extend the grace period for your next monthly premium payment by up to 60 days.

    Q: Will employees who are laid off temporarily as a result of COVID-19 concerns be permitted to rejoin the plan without a waiting period when they return to work?

    A: Yes. There will be no waiting period for current employees who are rehired by May 31, 2020. New hires are subject to any waiting period the plan requires.

    Q: Will I lose my job-based group-health coverage? 

    A: You may qualify for tax credits that can lower your monthly premiums and for lower out-of-pocket costs. Please inquire with your Benefit Account Manager if you have any questions.

    Q: Is our GMS pharmacy plan through MedTrakRx going to allow early re-fills on prescriptions if necessary?

    A: MedTrak has relaxed its refill-too-soon edits for non-opioid and non-specialty medications. These are not changes that will happen automatically and will occur at the discretion of dispensing pharmacists.

    Q: What does the Families First Coronavirus Response Act mean to covering testing for Covid-19?

    A: On March 18, 2020, President Trump signed the second coronavirus relief measure into law – the Families First Coronavirus Response Act (Act). Effective immediately, the Act requires group health plans and health insurance issuers to cover COVID-19 testing without imposing any cost sharing (such as deductibles, copayments, or coinsurance) or prior authorization or other medical management requirements. During this public health emergency, health plans and issuers must cover FDA-approved diagnostic testing products for COVID-19, including any items or services provided during a visit to a provider (in-person or telehealth), urgent care center or emergency room that relate to COVID-19 testing. This coverage cannot be subject to any plan deductible, copayment, or coinsurance. This coverage mandate does NOT require health plans and issuers to cover COVID-19 treatment at no charge. Exact coverage details for COVID-19 treatment, including any cost-sharing amounts, will vary by plan.

    Q: Will private health plans cover the cost of COVID-19 diagnostic testing that occurs prior to April 2?

    A: Yes, this section of the legislation is effective from the date of enactment, March 18, 2020, through the end of the national emergency period. The Act states that “a group health plan and a health insurance issuer offering group or individual health insurance coverage  shall provide coverage, and shall not impose any cost sharing (including deductibles, copayments, and coinsurance) requirements or prior authorization or other medical management requirements” for specific items related to testing or related health care provider visits.

    HR

    Q: What should Employers do if an employee discloses they have been in close contact with a person who tested positive or who is awaiting test results for COVID-19?

    A: According to the CDC, individuals who have had close contact with a person diagnosed with COVID-19 should self-quarantine. Employers can require an employee who has been exposed to the virus to stay home. Your HR Account Manager would be happy to help you navigate through these types of situations.

    Q: If an Employer is considering a temporary or permanent lay off what steps should be considered?  

    A: Employers should work closely with their HR Account Manager who will help guide them through this process. Items to consider include how to appropriately select employees for lay off, necessary documentation to provide to the employee, COBRA and Health Care Benefits (if applicable), and assisting with unemployment benefits.

    Q: If my state has instituted a “Stay at Home” order allowing only Essential Businesses to continue operation, what qualifies as an “Essential Business?” 

    A: In Ohio, for example, essential businesses are allowed to continue to operate, but must comply with social distancing requirements. A few examples of these are: 

    • Healthcare and public health operations
    • Human services operations
    • Essential infrastructure
    • Essential government functions
    • Stores that sell groceries and medicine
    • Food and beverage production and agriculture
    • Charitable and social services
    • Gas stations and businesses needed for transportation
    • Critical trades
    • Restaurants for off-premise consumption
    • Transportation
    • Professional services
    • Hotels
    • Home-based care

    For the full order and list, please reference the following link – Order to Stay at Home. 

    The Governor of Ohio has issued a Stay at Home Order effective March 23 at 11:59 p.m. and lasting for the next two weeks. Group Management Services is considered an Essential Business. All our services will continue as normal. We will also continue to monitor developments and recommendations from the CDC, Federal, State, and Local government. We hope you are doing well. Please let us know if there is anything we can do to help.

    Q: What are my next steps?

    A: If you are considered an essential business, we are happy to help guide you through the social distancing requirements. If you are unable to continue business because of the Stay at Home Order, we are happy to help you navigate next steps. If you have positions that have the ability to work from home, we are happy to help create a work from home policy. In the unfortunate event your business requires layoff of some or all of your workforce at this time, we can assist in documentation, communication, and next steps.   

    Q: President Trump signed the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, so its provisions go into effect no later than April 2. Will the leave provisions, Emergency FMLA (EFMLA) and Emergency Paid Sick Leave (EPSL) be applied retroactively?

    A: When a law is to be applied retroactively it will typically state so in plain language, which this legislation does not. Therefore, the law will likely not be enacted retroactively. GMS will alert you of any change to this.

    Q: From now until April 2, how should we handle employees who need time away from work for COVID-19 related reasons? What documentation should we require?

    A: Until the legislation takes full effect, continue handling these situations as you have been on a case by case basis. Work with your HR Account Manager for assistance. Rely on current employment policies, including but not limited to paid time off, paid vacation, sick leave, or other leaves of absence policies. Certification for certain absences (advisement by health care provider to self-quarantine, experiencing symptoms, seeking diagnosis) may be hard to obtain due to doctors not seeing patients, providing notes, or conducting full testing. GMS has created the attached Documentation on a COVID-19 Absence that may be used to gather facts and communicate details of a potential leave of absence. This would be filed in the employee’s confidential personnel file. 

    Q: Do you have the forms necessary for employees to file for EFMLA and EPSL?

    A: No, official forms or documentation have not been released yet by the Federal government. We will provide if, and when, they become available.  

    Q: Do we have to offer EFMLA and EPSL to employees who are already or who will be laid off prior to April 2?   

    A: No, if employees are laid off, they become eligible for unemployment compensation under the Emergency Unemployment Insurance Stabilization and Access Act. This is handled separately from EFMLA and EPSL. 

    Q: If I cut an employee’s hours, can they apply for partial unemployment?

    A: Yes, an employee experiencing a reduction in hours may apply for and obtain unemployment benefits. In Ohio, if the reduction in hours is due to COVID-19, employee should provide Mass Layoff ID# 2000180. These layoffs will not affect your unemployment rate as all coronavirus layoffs will be charged to the Ohio Unemployment Mutual Fund and will not be charged to your account.

    Q: If an employee is CHOOSING to stay home out of fear of exposure, how do you recommend we handle this scenario?

    A: Evaluate the safety precautions you, as a business, have taken to protect employees and prevent the potential spread of COVID-19. If you feel that you have taken all preventative measures within reason, review your current time off policies and available time off balances with the employee, or explain the unpaid model you have been utilizing. 

    Q: How can an employer apply for and receive the small business exemption to the leave provisions of the FFCRA?

    A: Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave in cases where the viability of the business is threatened. That said, it remains to be seen how to request an exemption and for which provisions of the legislation the exemption will apply to. Please note the FFCRA allows tax credits up to 100 percent of the cost of paid leaves. Under guidance that will be released this week, eligible employers who pay qualifying sick, childcare, or other leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying leave paid, rather than deposit them with the IRS. Per the legislation and the IRS, the payroll taxes that are available for retention include withheld federal income taxes, and both the employee and employer share of Social Security and Medicare taxes. 

    We will be covering tax credits and small business relief on Friday, March 27, 2020 during the next webinar in our COVID-19 webinar series. Please join us. You may register here: https://attendee.gotowebinar.com/rt/6872645169703825931 

    Unemployment

    Q: Will Coronavirus related layoffs affect my unemployment rate?

    A: Every state is different. In Ohio (where we are headquartered), these layoffs will not affect your rate. All coronavirus layoffs will be charged to the Ohio Unemployment Mutual Fund and will not be charged to your account.

    Q: Will my employees have a waiting week before their unemployment starts?

    A: No, Governor DeWine (Ohio) has waived the waiting period for all lack of work claims so employees can start collecting as soon as the claim has been processed.

    To learn more about GMS, visit https://www.groupmgmt.com/about-us/.

  • An underperforming employee in your organization is an unfortunate reality that every business owner may have to face at one point or another. When an employee is failing to meet expectations, not only do those directly associated with that employee suffer, but the entire company will eventually feel the ripple effect of these behaviors. These repercussions are typically felt more greatly and much more quickly within a smaller business, where every employee tends to play a larger role in the success and failure of your operation.

    Eventually, though, you’ll reach a point where it’s clear that the situation has to change. While terminating the employee may seem like the logical course of action when you reach this point, performance improvement plans may offer a better approach to employee performance management.

     Silhouette of a businessman pushing a boulder up a hill.

    What is a Performance Improvement Plan?

    A performance improvement plan (PIP), sometimes referred to as a performance action plan, is a tool used to give an underperforming employee the opportunity to succeed. Essentially, it can be viewed as a probationary period for employees. The plan itself should be a formal, written document that outlines any recurring behavioral and/or performance issues along with a specific timeline for the employee to achieve certain goals to regain good standing in the company.

    Steps to Implementing a Performance Improvement Plan

    The Society for Human Resource Management (SHRM) outlines the steps that organizations should take to implement a performance improvement plan:

    1. Identify the Underperforming Employee

    Underperforming employees can be challenging to identify within an organization. For example, an underperformer could be a new hire that has a larger learning curve than originally anticipated. Even a top performer can become disengaged if there’s a lack of growth opportunities or challenges. According to PeopleGoal, an employee experience platform, some signs that may suggest that an employee is struggling include:

    • Decreased productivity
    • Decreased engagement
    • Increased time off
    • Increased tardiness

    2. Determine the Right Course of Action

    Performance improvement plans can be beneficial in certain circumstances. However, they can also be a detriment if there isn’t a genuine commitment to improvement. SHRM says that performance improvement plans should be implemented when there is “a commitment to help the employee improve, not as a way for frustrated managers to start the termination process.” 

    To assess whether a performance improvement plan is the appropriate next step, ask yourself:

    • Is it likely that the issue can be resolved through a formal improvement plan? Problems that involve sales goals, quality ratings, and other quantitative objectives are typically issues that could be resolved with a performance improvement plan. Issues related to a poor attitude or bad behaviors, on the other hand, usually aren’t as well-suited to using the goal-oriented process of a performance improvement plan.
    • Has the employee received the proper training to perform the job well? Was the employee’s onboarding process sufficient? Additional training outlined in a performance improvement plan can help correct any gaps in training.
    • Is there a known personal issue affecting the employee’s performance? When an employee experiences troubles in their personal life, it can affect their work performance. A performance improvement plan can help the employee get refocused and back on track in a reasonable time frame.

    3. Draft an Improvement Plan

    Once the need for a performance improvement plan has been established, it’s time to start drafting the plan. As you write the performance improvement plan, be sure to:

    • Define what is considered an acceptable level of performance. Consider the employee’s job description as well as the company guidelines outlined in your employee handbook.
    • Identify areas where the employee’s performance is lacking. Include specific details, such as dates, specific data, detailed explanations, and any previous guidance or reviews given to the employee.
    • Set specific, measurable, attainable, relevant, and time-bound (SMART) goals. Keep in mind, performance improvement plans usually last 30, 60, or 90 days. An example of a SMART goal could be, “John Smith must produce at least 100 units per month for the next three months.”
    • Provide guidance on what the company will do or provide to help the employee achieve these goals. For example, a manager might provide additional training, resources, or coaching to help an employee close a skills gap.
    • Include how often you will meet with the employee to review their progress. Weekly check-in meetings can be common, but the frequency can depend on the goals or circumstances.
    • Clearly state the consequences of not meeting the objectives of the plan. Consequences may include a demotion, transfer to a different position, or termination.

    4. Review the Plan

    It’s important to remove any bias against the employee from the performance improvement plan, especially if you work closely with the employee. Ensure that the performance issue is clearly stated, the goals are fair, and the deadlines are reasonable. It could be in your best interest to have someone in HR review the plan to ensure the plan is attainable and fair.

    5. Implement the Plan

    It’s now time to meet with the employee to discuss the plan and your expectations. A word of caution: performance improvement plans tend to get a bad rap with employees, as they can often be seen as the first step toward termination. As a result, some employees may decide to quit, rather than stick around for what they believe to be inevitable. It’s also important to note that not every employee will respond to criticism well.

    When you meet with the employee, it’s important to communicate the company’s commitment to the plan and to the employee’s success. Employee feedback should also be encouraged during this time to help clarify any areas of confusion and understand their perspective on the current situation. After reviewing the plan and making any modifications, you and the employee should both agree to and sign the written plan.

    6. Monitor Progress

    As stated in the performance improvement plan, you should regularly meet to review the employee’s progress toward meeting their performance goals. Ensure all meetings are scheduled and occur on time. Cancelling, rescheduling, or tardiness to meetings could convey a lack of importance or commitment from you to the employee.

    During these check-in meetings, evaluate the employee’s progress, identifying why progress has or has not been made. If needed, provide solutions or resources to help get the employee back on track.

    7. Plan Conclusion

    The outcome of a performance improvement plan is situational. In an ideal scenario, the employee would reach their goals by or before the plan’s deadline. If this is the case, formally close the performance improvement plan, recognize the employee’s success, and allow the employee to continue employment with the expectation of continued good performance.

    If an employee falls short of meeting their performance goals in the given timeline but is committed to improvement, it could be worthwhile to extend the deadline. In other situations where the employee is unable to improve or their performance worsens, you’ll need to consider whether a transfer, demotion, or termination would be in the best interest of the company.

    Benefits of a Performance Improvement Plan

    Regardless of the outcome, there are many benefits to implementing a performance improvement plan. The process of identifying the root causes of poor performance, outlining clear expectations for improvement, and giving the employee a chance to rectify shortcomings could save significant time and costs related to termination and re-hiring. Additionally, by having these types of plans in place, you’ll create a culture of performance accountability and continuous improvement along every rung on the corporate ladder. 

    Employee Performance Management Services

    As a business owner, performance management is critical to making decisions related to training, career development, compensation, transfers, promotions, and termination. Professional employer organizations (PEOs) like Group Management Services can help. Whether it’s reviewing a performance improvement plan, documenting performance reviews, or even initiating demotions, transfers, or terminations, we can take on the administrative challenges associated with managing employees. In addition to performance management, we can provide comprehensive HR services, including payroll, benefits, and risk management. Contact GMS today to learn more about our employee performance management services.

  • 2020 has brought an abundance of challenges to people all over the world. It seems that when we think that things can’t get any worse, we are hit with another obstacle. With all the uncertainty, lost jobs, illness, and lack of toilet paper, it’s easy to say that this year has been anything but a smooth ride. 

    Overall, this year and pandemic has taken a major toll on many people’s mental health and well-being. It is so important now more than ever to be aware of your employee’s health and be sure they are given the necessary resources to live as stress free as possible. 

    An employee relaxing to help support mental health in the workplace. 

    COVID-19’s Impact on Employees’ Mental Health

    The stress of COVID-19 has caused a great amount of fear to more aspects of people’s lives other than just catching the virus. Individuals are losing jobs and becoming financially unstable, graduating college students are being thrown into one of the worst job markets, death rates from the virus are increasing by the day, and people who quarantine are missing social interaction with friends and family. 

    Below is a list of just some of the mental health statistics in America.

    • In late June 2020, 40 percent of adults in the U.S. stated that they have been struggling with mental health issues or substance abuse. (CDC)
    • The rate of moderate to severe anxiety peaked in September of 2020, with over eight in 10 people who took an anxiety screen scoring with moderate to severe symptoms. (Mental Health America)
    • An estimated 26 percent of Americans ages 18 and older – about one in four adults – suffers from a diagnosable mental disorder in a given year. (John Hopkins Medicine)

    What Employers Can Do to Support Employees’ Mental Health

    Many individuals may feel stressed or pressured to go into their work facilities or offices. There are multiple ways for employers to take care of their employees during these difficult times.

    Create a system of support and trust

    Let your employees know that you are there for them and form a sense of trust. One of the issues people face is not knowing where to turn in times of hardship. Being open and transparent with your employees can give them the opportunity to search for help before things become too overwhelming for them.

    Provide your employees with resources

    It is absolutely necessary for all employees to have access to beneficial resources to educate them and help them cope with mental health issues. Some examples of helpful websites are the American Psychological Association, Anxiety and Depression Association of America, and the CDC. These sites all include information on a variety of mental health issues as well as ways to improve symptoms and live a healthier life. Also, your company’s HR departments should consider providing an Employee Assistance Program for all employees, with access to licensed professionals. 

    Create a healthy work environment

    Employees can feel less stressed or anxious at work if the environment is positive. Have casual conversations with them and get to know them on a personal level. Also, have biweekly or monthly check-ins to see how your employees are feeling or if they are having any additional stress in their life. Form a culture that is inviting, happy, and supportive.

    Hold mental health trainings

    The best way to inform all employees to be aware of mental health is having all-office trainings. Educating your company on what mental health is, what the warning signs are, and how to take care of themselves and others can make a huge difference. This can help prevent issues further down the line and reassure others that it is ok to struggle with mental health.

    If you or someone you know is struggling with a mental illness, reach out to your primary care provider. For emergencies, contact the SAMHSA National Help Line at 1-800-662-HELP.

  • It’s no secret that HR management is an extremely complex and time-consuming process for any small business. That’s why many small business owners turn to Professional Employer Organizations (PEOs) to help companies take control of key HR functions like payroll and employee benefits. Of course, there’s one major question for anyone interested in these services: How much does a PEO cost? 

    PEO pricing can vary greatly depending on the PEO you work with and the services you need. Regardless of your needs, it’s critical to partner with a PEO that can not only simplify your business’ HR needs, but also save your organization more money than you spend. Let’s break down how PEO pricing works and what you can expect to pay for HR outsourcing.

    A notebook containing PEO costs. 

    What Do You Pay for When Partnering with a PEO?

    There are multiple factors that impact PEO pricing. The simplest answer is your PEO costs cover a couple of different items:

    • Administrative fees
    • Setup costs
    • Pass-through costs or additional fees associated with different HR functions

    It’s important to note that PEO costs only apply to what you pay the PEO for services rendered and not business costs like payroll taxes and health insurance premiums. For example, you would still owe payroll and workers’ compensation taxes even if you did not partner with a PEO. However, a PEO can work with you to manage these functions and potentially save you money through means like master health plans and self-insured workers’ compensation.

    Administrative fees

    A PEO’s administrative fees are a set rate that accounts for all the ongoing work involved with managing a company’s account. These costs cover tasks that vary from handling payroll and payroll tax deposits to managing and paying workers’ compensation premiums. It also covers any time spent assisting business owners with any HR problems and questions that inevitably arise over time.

    PEO pricing for administrative fees can vary greatly based on the company you work with and the services they provide. For example, a PEO that only offers basic payroll and workers’ compensation assistance will have lower rates than a PEO with a comprehensive suite of HR services. 

    Administrative fees are typically invoiced every pay period. The specifics on how much your company is billed for administrative fees depends on the pricing model. There are three main pricing models that PEOs use for administrative fees.

    • Percentage of payroll
    • Per employee
    • Per check

    Percentage of payroll

    This pricing model bases administration fees around a flat percentage of your overall payroll. The percentage charged is based on multiple factors such as your total number of employees and payroll. The exact percentage depends on the PEO, but a typical range falls between two and six percent. However, business with seasonal employees may see percentages higher as a result of all the part-time workers.

    One advantage of the percentage model is that it helps business owners understand what they’re paying each pay period in administration fees – simply identify total payroll for the period and apply your flat percentage. However, this percentage can pose problems on occasions when your payroll is notably higher than usual, such as bonus payout periods. Depending on the PEO, you may be able to make special arrangements to adjust for bonus runs and avoid extra administration fees.

    Per employee

    Another pricing model is to charge an administrative fee for each of your company’s employees. This method means that a PEO’s fees aren’t tied to total employee compensation, which can be an attractive option. 

    The exact per employee rate can depend on the PEO in question. A more basic PEO may have rates as low as $10 per employee per week, whereas companies with more comprehensive offerings and customer service may be four times that amount.

    Per check

    The final pricing model is to pay administration fees per check. The PEO can calculate the number of payrolls and identify a flat fee to charge for every paycheck you hand out each pay period. The per check model is similar to the per employee approach in that it doesn’t tie your fee rates to your overall payroll.

    Per check fees can become complicated if your business has a large number of part-time employees who split up a certain number of hours. For example, if one person works a different day each week, you’ll need to cut checks out to each individual. This scenario will drive up your fees as opposed to one person working the same amount of hours. As such, the per check pricing model is better suited for businesses with more full-time employees.

    One-time and annual setup fees

    All PEOs will have some form of initial setup fee when you start your partnership. These one-time setup fees are designed to cover all the frontloaded services done to get your company up and running with a PEO. These tasks include a wide variety of setup project, some of which include:

    • Onboarding employees
    • Gathering necessary documents and information
    • Establishing payroll and direct deposit
    • Setting up withholdings for payroll, benefits, 401(k), etc.

    As you may expect, these initial setup fees vary depending on your PEO of choice. Typically, you’ll find that the majority of these fees range from $50 to $200 per employee. Certain services may also require additional setup fees or annual costs. For example, companies that use a PEO to manage 401(k) plans would owe a small setup fee for the plan, along with an annual service charge.

    Additional services

    While administrative and setup fees make up the vast majority of PEO costs, some PEOs also offer a variety of additional services available when needed. The exact services depend on what the PEO had to offer, which can include:

    • Background checks
    • Drug and alcohol testing
    • Drug-free safety plans
    • Flu shots
    • Employee assistance programs
    • Training programs (First aid, CPR, supervisor/leadership)
    • Recruitment/ad placement
    • Translation services

    Each of these services will typically call for some type of pass-through cost when you need them. The pricing models vary greatly based on the service. For example, a background check may cost around $10 to $40 for each check. Other services may charge a flat rate based on the number of employees participating. Your PEO should be able to provide clear pricing for these additional service in advance.

    Bundled vs. Unbundled PEO Billing

    Pricing models and setup fees are only part of the billing puzzle. It’s also important to factor in how your PEO presents your bill every pay period. There are two main ways that PEOs invoice companies:

    • Bundled bills
    • Unbundled bills

    Some PEOs opt to bundle all their rates and other HR costs into a single line item. This process makes it difficult to parse out exactly how much you’re paying for each cost, including your PEO fees. While you can subtract all of your HR costs – social security, Medicare, workers’ compensation, etc. – it takes time and knowledge of established tax rate to break down your exact PEO costs.

    Unbundled billing simplifies this process. This method breaks out each cost as an individual line item, allowing you to clearly see what you’re being charged for everything on your invoice. As such, unbundled billing means you can always identify how much a PEO charges for administrative fees without an extensive amount of math.

    Find the Right PEO for Your Business

    Comparing quotes is an important part of evaluating PEOs, but costs are just one part of the puzzle. It’s important to find a PEO that not only offers the services you need, but also the best, most cost-effective approach to making your business simpler, safer, and stronger.

    All PEOs are not created equal. At Group Management Services, we strive to take the administrative burden off your shoulders and work with you to find the right solution for your HR needs. Contact GMS today to talk to one of our experts about how we can save you time and money through expert HR management.

  • As politics become more polarizing, small businesses can get stuck in an uncomfortable position. For every employee who can express political beliefs without creating any issues within the workplace, certain conduct can have a direct impact on your business.

    Managing political discussions in the workplace is a tricky balancing act. On one hand, different opinions and an open culture can create new relationships and creative ideas. On the other hand, certain discussions can create animosity between individuals that fractures company morale and impacts productivity. Employers must also consider potential legal protections for political speech. 

    With all these factors, it’s easy to view political debates in the workplace as ticking time bombs for your business. Fortunately, there are steps you can take to manage political discussion in the workplace and protect your business.

    A group of employees arguing after discussing politics in the workplace. 

    Understand Your Legal Responsibilities Regarding Political Discussion

    Before you can take measures to handle political activity within the workplace, it’s essential to understand what you can and can’t do in terms of managing political discussions as an employer. Certain regulations may limit your potential options for preventing problems created by heated political discussions, so it’s critical to stay compliant with existing local and federal laws.

    One of the most notable potential concerns about limiting political discussion in the workplace is the First Amendment. According to the National Law Review, “in most states, employees of private companies are not protected from discrimination based purely on political affiliation or activity.” While the First Amendment prohibits the government from restricting free speech, private employers are generally able to set their own rules regarding acceptable speech. This means that small business owners do have some control over what can be said in workplace scenarios.

    Of course, there are some notable exceptions to what private employers can prohibit in terms of political talk. To start, the National Labor Relations Act allows private employees to discuss labor-related issues, such as wages and hours. This also extends to topics like working conditions and unionization, which some may construe as political. 

    Certain states and cities also have laws in place to protect political expression. Employers should not be seen as taking any measures to discriminate against employees for their political or voting activities. In addition, many states and cities disallow employers from influencing their employees’ political decisions as well. These rules can vary by state or city, so you’ll need to review your local laws to see if your business is affected by any of the following: 

    • Laws to prohibit employers from retaliating against employees for engaging in “political activities.”
    • Laws to protect employees’ right to express “political opinions.”
    • Laws to disallow discrimination against employees based on party membership or engagement in election-related speech and political activities.

    What Small Businesses Can Do to Manage Political Discussions in the Workplace

    While existing laws create some limitations in terms of what you can and can’t prohibit, there are measures you can take to manage political debates among employees without leaving yourself in legal trouble.

    Create policies against discrimination that apply to all employee groups

    One major point of contention in political discussions gone wrong is when one or more employees view another worker’s words or actions as discriminatory. One person’s opinion may seem like harassment to another, which can create serious internal concerns. 

    While you may not be able to cleanly parse through people’s opinions, you can institute anti-discrimination and harassment policies to snuff out any egregious behavior inside and out of political discussions in the workplace and online. These policies can make it clear where your business stand when it comes to discrimination against:

    • Race
    • Gender
    • Age
    • Religion
    • Ethnicity/nationality
    • Disability/medical history
    • Marriage/civil partnership
    • Pregnancy/maternity/paternity
    • Gender identity /sexual orientation

    You should also make it clear how employees can safely report harassment in the workplace. Employers are obligated to take any harassment or discrimination claims seriously and investigate all employee complaints. If you deem that any political discussion devolved into harassment involving the aforementioned protected characteristics, you can use that as grounds to resolve the situation quickly and effectively, whether that’s a warning to the offending party or further punishment.

    It’s also important to make sure that these policies are equally applied for all employees. Every individual should be held to the same standards when it comes to discussing politics at work whether they are an entry-level employee or an executive.

    Have a policy to limit or ban visual political displays

    Political discussions don’t need casual conversations to become an issue. Visual displays such as posters, stickers, or campaign buttons can trigger unwanted conversations unless you put a policy in place to prevent these problems.

    While certain topics are protected, employers are able to ban political clothing or items on work premises. Whether the message displayed on a coffee mug, bumper sticker, or other item is positive or negative in nature, you can limit or completely prohibit these visual displays in your office or other work areas. In turn, these items won’t be able to instigate any unwanted political discussions.

    It’s also important to remember that these visual displays can extend to accidental sources as well. For example, office televisions can create an unwanted situation if you’re not careful. Be careful which types of television programs play to prevent accidental conversation starters – depending on the current political climate, it may be best to turn off these sources altogether.

    Dissuade against touchy subjects

    While difficult subjects can create meaningful conversations, there are certain topics that can quickly devolve into heated arguments. It’s best not to call out these topics in any policies – doing so may only call more attention to them for certain individuals. However, that doesn’t mean that you can’t try to diffuse any situations involving hot button issues at work.

    If a debate involving a touchy political subject arises on a public platform at work, make sure that your or some other HR representative steps in to pacify the situation. You want to make it clear that while you don’t want to hinder anyone’s political beliefs, the employees must maintain a friendly work environment and that their current discussion is creating conflict. If the employees have any concerns or continuing issues, you and any other HR representatives can meet with them in private to determine a solution that’s fair for everyone involved.

    Protect Your Business from Uncomfortable Situations

    While you can’t necessarily eliminate political discussions in the workplace, you can help limit unwanted conversations that can negatively impact your business. By setting clear, consistent policies and creating a healthy workplace environment, you can help your employees thrive even if they don’t necessarily agree on certain viewpoints.

    Of course, it’s not always easy to create and maintain comprehensive policies and oversee any disputes in the workplace. As the owner of a small business, those responsibilities can fall to you. Fortunately, GMS can help take this burden off your shoulders. Our experts can work with you to create compliant policies and protect your business. Contact GMS today to talk to one of our experts about how we can make your business simpler, safer, and stronger.

  • When the COVID-19 pandemic hit, businesses of every size had to pivot to a work-from-home model for non-essential employees. While larger firms typically had some infrastructure in place to enable remote work, small businesses were left wondering exactly how to handle the situation.

    While cybersecurity has always been essential, the increasing number of remote employees has made it mission-critical for business of all sizes. Fortunately, there are steps every small business can take to step up its cybersecurity game. Regardless of how long remote work lasts, here are some tips that will help shore up any security protocol.

    A remote employee working from a laptop set up for cybersecurity threats.

    Set up VPNs Correctly

    Virtual Private Networks (VPNs) are internet tunnels that allow access into companies’ internal networks. While VPNs were initially intended for letting employees access company resources from any location, they are also a prime target for hackers. 

    A VPN is a standard measure for remote employees, but a hastily implemented network will pose problems. These VPNs are widely available, but you need to do more than download an app to truly secure your company’s data. You’ll want to identify a VPN with secure communication protocols that can keep you and your employees safe. While there are free VPN services out there, it’s best to find a safe, secure solution even if it’s an added cost. 

    Another key step is to make sure employee access is controlled – you don’t want one login to access the whole network. Configuring access on an application level means employees can get to files and web applications without allowing root-level access. If one connection is hacked, the hackers won’t get the keys to the entire kingdom.

    Set Password Policies

    Employees must also use a password to access the VPN, as well as many other company resources. Weak passwords are one of the biggest security threats to anyone connected to the internet. 

    While you can’t stop your employees from using their cat’s name as a password on their personal computers, you can set password policies on your company’s software and hardware. Those policies should require a minimum length, a combination of characters, and other requirements that create a harder-to-hack password. You should also require passwords to be changed at specified intervals. 

    Use Two-Factor Authentication

    Passwords – even strong passwords – aren’t necessarily good enough anymore. Two-factor authentication (2FA) is an extra precaution that can make a massive difference if somebody’s password is compromised. 

    2FA requires two different factors to allow access into a device or program. There are generally three factors recognized as authenticators – something you know (usually a password or PIN), something you have (a smartphone or key), and some form of identity confirmation (fingerprint or face ID).

    The most familiar form of “something you have” is the text message sent to your cell phone – but hackers can steal SIMs and easily gain access, so it’s not necessarily the best. More secure methods include authenticator apps and security keys. Finally, as more hardware devices come with biometric sensors built in, “something you are” fingerprint and face ID authentication are becoming more commonly used factors.  Regardless of the approach you use, 2FA adds another step that hackers must figure out in order to access your sensitive information.

    Keep Software and Systems Updated

    Out-of-date software is one of the biggest security threats to any company. The cyberthreat landscape is constantly evolving, and software manufacturers must continuously update their products to keep up with those threats. “Patches” are often issued to fix areas of vulnerabilities. Failure to apply these patches can be a massive issue for your company. 

    A notable example of this is 2017’s WannaCry ransomware attack. These cyber attacks resulted from hackers exploiting unpatched Microsoft systems. Although Microsoft had issued a patch just before the attack, many organizations had not applied it, leading to mass data breaches. Additionally, some of those systems attacked were using older systems that had passed end-of-life, meaning Microsoft was no longer issuing patches or updates for those systems. This is why it is essential that your organization keep up with any changes for your software and update it regularly.

    Educate Employees About Cyber Threats

    Hackers depend on non-tech-savvy users to welcome them into systems through phishing or social engineering schemes. The growing trend of remote employees has only made this more apparent, as hackers fed on the double-whammy of a remote workforce and a concerned population. 

    A joint alert from the U.S. Cybersecurity & Infrastructure Agency (CISA) and the U.K.’s National Cyber Security Centre warned of “a growing use of COVID-19-related themes by malicious cyber actors.” This included phishing and malware attempts such as emails with “coronavirus update” subject lines or SMS messages about COVID relief packages. These cyber attacks encouraged recipients to open a malicious file or visit a phishing site that asks for credit card numbers and other personal information.

    Social engineering is another scheme that has become more prevalent. This involves a technique in which a hacker manipulates a victim to get information about a company. In a high-profile example, hackers took over several celebrity Twitter accounts as a result of social engineering – hackers gained access to these accounts by manipulating Twitter employees for information. 

    While security audits, penetration testing, and other high-level security testing are important to ensure total security, small attacks can terrorize small business owners everywhere. Take some time to teach employees how to recognize phishing emails or social engineering attempts to protect your small business.

    Secure Home Offices

    When employees were safely on your company network and behind the firewall, some of their risky behaviors were slightly less threatening. Once they’re at home, your company is more reliant on their home Wi-Fi networks. 

    These networks can be incredibly insecure. Often, default passwords haven’t been changed – if there is one at all. Do a home audit of work-from-home staff to make sure they have configured settings on their home Wi-Fi correctly. This is perhaps the most basic security measure, but one of the most necessary.

    Protect Your Business from Remote Cyber Threats

    As companies like Google and Twitter set the stage for remote work to become permanent, many smaller companies will follow suit. If your business relies on remote employees, it’s essential to have a remote cybersecurity setup that will work for the long term. 

    Cybersecurity is just one of many responsibilities small business owners bear that can take time away from one key goal – to grow their business. Between security concerns to administrative efforts, it’s hard to focus on ways to build your business. Fortunately, you don’t have to carry the latter burden alone.

    As a Professional Employer Organization, GMS has the experts and means available to help simplify your various administrative needs. We can help you identify ways to protect your company while also managing payroll administration and other time-consuming tasks. Contact GMS today to talk to us about how we can help you protect your business through professional HR management.

  • Running a business is no easy task. Not only do you have to focus on how to build your business, you also have to manage all the administrative efforts it takes to handle payroll, benefits, and other complex business functions. 

    Fortunately, there are ways for business owners to ease these administrative burdens. Human resources outsourcing organizations like Professional Employer Organizations (PEO) and Administrative Services Organizations (ASO) can help owners manage these crucial tasks. Of course, both types of organizations have key differences that can impact which option is best for you and your business. Let’s break down the differences between a PEO and ASO.

    A small business owner deciding between a PEO and an ASO. 

    PEO vs. ASO

    Both PEOs and ASOs are HR outsourcing organizations that can help business owners focus on money-making tasks instead of spending their time on administrative activities. However, PEOs and ASOs differ greatly in terms of service offerings and the way they approach HR management.

    What is a PEO?

    A Professional Employer Organization (PEO) partners with employers to provide a wide range of HR outsourcing services. Business owners can utilize PEOs for a full suite of services like payroll, tax administration, HR, benefits, and risk management or opt to use them for individual services like payroll.

    One of the unique aspects of working with a PEO is the co-employment relationship between your business, your PEO, and your employees. In this relationship, the PEO serves as the “employer of record.” You maintain full control of your employees, but the PEO can take care of managing your administrative functions and keep your business up-to-date with and new regulations and other concerns. 

    This arrangement is also beneficial for tax and insurance purposes. Not only does the PEO assume some of your compliance risks, you can also take advantage of the features like the PEO’s unemployment rates and claims, master plans for group health insurance, and other perks you can’t receive without co-employment. The PEO can also gives you access to tools and experts who can make it easier for you and your employees to access key payroll, benefits, and other HR information. 

    What is an ASO?

    As with PEOs, ASOs can offer a range of HR services for businesses in need of administrative assistance, although they typically don’t handle benefits coverage or workers’ compensation as often as PEOs. 

    ASOs also don’t engage in co-employment. This means the business is still the employer of record. This arrangement means that the business is liable for their own payroll taxes, claims, and state unemployment rates. For example, the ASO may file taxes, but they do so under your company tax ID instead of taking on that liability.

    Find the Right HR Outsourcing Company for Your Business

    When you need to ease your HR burdens, it’s important to determine an option that’s most suited for your needs. If you have existing HR staff and need an extension of your internal department to handle administrative tasks, an ASO may make sense. If you want a company that can partner with you to assume some of the administrative risks while managing key HR functions, a PEO is the best option. 

    It’s also important to find which exact company is right for your needs. You’ll want to vet each potential PEO of ASO about their services, customer support, and what you specifically need to protect and prepare your business.

    Ready to make your business simpler, safer, and stronger? Contact GMS today to talk to one of our experts to find out if a PEO is right for your needs.