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  • Employee classification is a fundamental aspect of proper human resources (HR) and payroll management, but it can also be a challenge to properly follow and understand. Across industries, workers are identified into different classes. The classification that fits your job and responsibilities determines your wage requirements, health benefits, overtime pay eligibility, tax liability, and more. When an employee is incorrectly classified, it can have a costly impact on the company and the employee, while also increasing the probability of payroll errors and compliance risk.  

    Proper employee classification is important for business owners to manage, but it can be an overwhelming and confusing process. Continue reading to learn more about proper employee classification, what it entails, and why it’s important for business owners to watch. 

    What Is Employee Classification? 

    Employee classification refers to the process of categorizing workers based on the work they perform, their responsibilities, and their relationship with the company. This classification determines the rights, benefits, and wage protections they’re entitled to under federal, state, and local law.  

    Common employee classes include:

    1. Full-time employees 
    2. Part-time employees 
    3. Hourly employees 
    4. Salaried employees 
    5. Contractors/freelancers 
    6. Temporary employees 
    7. Here is the full list of employee classes 

    Classification influences key payroll decisions, including tax withholding, overtime eligibility, benefit administration, and labor compliance. Misclassification can lead to costly penalties, back pay obligations, reputational harm, and legal disputes.  

    Common Types of Employee Classifications 

    While classifications can vary by industry, most organizations rely on these core categories: 

    Full-Time Employees

    Full-time employees typically work between 30 and 40 hours weekly. They receive consistent wages or salaries along with access to employer-sponsored benefits. Many full-time roles may be classified as exempt from overtime under the Fair Labor Standards Act (FLSA) if they meet salary and job requirements.  

    Part-Time Employees 

    Part-time staff work fewer hours, often less than 30 a week, and may not receive full benefits. They are usually considered nonexempt, meaning they qualify for overtime pay when they exceed hourly limits.  

    Temporary Employees 

    Temporary workers are hired for a defined period or project. Although they may work variable schedules, they are still classified as employees, not contractors, and must be classified appropriately to ensure payroll compliance. 

    Independent Contractors

    Contractors operate as separate business entities and are not entitled to employee benefits or wage protections. Properly determining whether a worker is a contractor or employee requires a deep, detailed analysis of the relationship between the individual and the company, the length of the employment, and more.  

    Salaried Workers 

    Salaried employees receive a fixed amount of money for the year. They receive a fixed amount of their salary every pay period.  

    Hourly Workers

    Hourly employees are compensated by the hour. They have a fixed rate of payment per hour, making their annual earnings vary. 

    Why Accurate Employee Classification Is Critical to Payroll 

    Ensures Legal Compliance 

    Correct classification ensures compliance with federal laws like the FLSA, which governs minimum wage, overtime pay, and worker protections. Misclassification, such as treating an employee as an independent contractor, can lead to significant fines, back pay requirements, and legal disputes. 

    Prevents Payroll Errors

    Different classifications require different payroll treatments. For example: 

    1. Exempt employees are paid differently from hourly nonexempt employees 
    2. Contractors receive 1099 forms, not W2s 
    3. Benefits eligibility varies widely 

    A misstep in classification easily leads to payroll inaccuracies, overpaying, underpaying, or missing required deductions.  

    Impacts Tax Withholding 

    Employee status determines tax obligations. Employees require withholding for federal, state, and payroll taxes, while contractors manage their own tax liabilities. Misclassification can result in IRS penalties and liability for unpaid taxes.  

    Ensures Proper Benefits Administration 

    1. Health insurance 
    2. Retirement plans 
    3. Paid time off (PTO) 

    Classifying workers correctly ensures benefits are extended appropriately and prevents costly compliance issues or confusion. 

    A PEO and Employee Classification 

    Employee classification plays a crucial role in how organizations manage their people, their payroll, and their compliance. With a workforce that is more diverse than ever, businesses must understand the differences between employee types and ensure each worker is categorized accurately. 

    Group Management Services (GMS), a professional employer organization (PEO), can be your partner when it comes to employee classification, compliance, and payroll. With a knowledgeable team of experts, GMS can ensure proper classification, streamline the payroll process through our easy-to-use software, and help you manage your tax liabilities and calculations. By taking time to classify workers correctly, organizations avoid compliance risks, maintain accurate payroll processes, and create a more transparent, compliant work environment. 

    Contact us to learn more about our services!

  • When payroll is done right, employees barely think about it. When it is not, they notice immediately. 

    For many business owners, payroll starts and ends with payday. But in reality, payroll extends far beyond paychecks. It influences employee trust, compliance, and how your business is perceived as an employer. Every pay period is a moment when expectations are either met or missed. 

    As businesses balance growth, shifting regulations, and daily operations, payroll can quietly become one of the most time-consuming and high-risk responsibilities on their plate. While it often happens behind the scenes, its impact is felt across the entire organization. 

    Every Paycheck Reflects Your Business 

    Payroll is one of the most consistent interactions employees have with their employer. Whether they realize it or not, employees draw conclusions based on how payroll is handled. 

    Accurate, on-time pay builds confidence in leadership and reinforces stability. Clear pay statements and accurate deductions signal transparency and attention to detail. Proper tax withholding and benefits administration demonstrate an employer’s organization and compliance. 

    Even small errors can erode trust and influence how employees talk about their workplace, both internally and externally. In today’s competitive hiring environment, those perceptions matter. 

    Payroll Touches More Than Just Finance 

    For business owners, payroll rarely exists in isolation. It connects directly to benefits administration, time tracking, workers’ compensation, tax filings, and labor law compliance. It also plays a role in onboarding new hires, managing pay changes, issuing bonuses, and handling employee exits. 

    Each of these areas carries its own rules and requirements. As regulations change at the federal, state, and local levels, staying compliant becomes more complex. The more manual processes involved, the greater the risk of errors. 

    Payroll Mistakes Rarely Stay Contained 

    Payroll errors do more than create short-term inconvenience. One issue can trigger employee dissatisfaction, internal disruption, and compliance exposure. 

    Employees lose confidence in their employer when they have to question their pay. Human resources (HR) and leadership teams spend time correcting issues rather than focusing on growth and retention. Compliance mistakes can lead to penalties, audits, or legal challenges. 

    Even when issues are resolved quickly, the experience leaves an impression. Employees remember how problems made them feel, not just how fast they were fixed. Over time, repeated issues can quietly undermine morale and retention. 

    Consistency Builds Employee Confidence 

    One of the strongest contributors to a positive employee experience is consistency. Employees want to know that their pay will be accurate, timely, and easy to understand each pay period. 

    Reliable payroll processes create a sense of stability and professionalism. They show that the business is prepared, organized, and respectful of employees’ time and livelihood. This consistency supports engagement, improves retention, and strengthens employer reputation. 

    Payroll as a Foundation for a Stronger Employer Brand 

    Employer branding is shaped by everyday experiences, not just benefits packages or recruiting campaigns. Payroll is one of the most frequent and meaningful touchpoints between an employer and their workforce. 

    Effective payroll management builds trust, professionalism, and satisfaction, while poor management can damage a company’s culture. Payroll may operate behind the scenes, but its impact on your business and your brand is significant. 

    Why Payroll Feels Overwhelming for Business Owners 

    Payroll rarely becomes a challenge because business owners are inattentive. It becomes overwhelming because of how much is involved. 

    • Tracking hours accurately.
    • Managing different pay types. 
    • Applying wage and hour laws correctly.
    • Filing payroll taxes on time.
    • Coordinating benefits deductions.
    • Responding to employee questions.
    • Fixing issues when something goes wrong. 

    All of this happens while business owners are also managing operations, customers, and growth. Over time, payroll can feel like a constant source of stress rather than a routine process. 

    Taking Payroll Off Your Plate Without Losing Control 

    Outsourcing payroll does not mean giving up oversight. It means gaining support, expertise, and built-in safeguards. 

    With the right partner, payroll processes are streamlined, compliance requirements are monitored, and potential issues are addressed before they become problems. Technology reduces manual work, and expert guidance helps businesses stay ahead of changing regulations. 

    Employees benefit from accurate pay and clearer communication. Business owners regain time and confidence, knowing payroll is handled correctly. Contact GMS today and learn how we can help you take payroll off your plate! 

  • As the new year begins, business owners should be thinking ahead to one of the biggest administrative responsibilities of the year: preparing for W-2s, 1099s, and tax season. Early preparation helps ensure compliance, avoid penalties, reduce stress, and create a smooth experience for you and your team. 

    This guide breaks down what you need to know, including form definitions, how to classify workers correctly, key deadlines, proactive steps to take, and how Group Management Services (GMS) can support you every step of the way. 

    Understanding W-2 vs. 1099: What’s the Difference? 

    A critical first step for tax season is knowing which tax forms apply to your workers. 

    What is a W-2? 

    A Form W-2, or Wage and Tax Statement, reports wages paid to employees and the taxes withheld on their behalf. Employers must withhold federal income tax, Social Security, Medicare, and other applicable taxes, and report that information on the W-2. 

    What is a 1099? 

    A Form 1099-NEC reports non-employee compensation, such as payments to independent contractors, freelancers, and other non-employees, when total payments reach certain thresholds. Unlike W-2 wages, these payments are not subject to tax withholding. Contractors are responsible for their own tax obligations. 

    Accurate classification between employees and independent contractors is essential. Misclassification can lead to penalties and compliance issues with the Internal Revenue Service (IRS). 

    Why Compliance Matters  

    Complying with IRS rules for payroll and information returns is not just paperwork. It is a legal requirement that protects your business. 

    Avoiding Costly Penalties 

    Failing to file correct W-2 and 1099 forms on time can result in penalties that increase the later you file. The IRS tracks timeliness and accuracy, and penalties can add up quickly, especially if mistakes are widespread or repeated. 

    Keeping Worker Records Straight 

    Providing accurate forms to employees and contractors helps them file their own tax returns correctly and prevents mismatches with IRS records that could trigger audits or notices. 

    Supporting Your Team’s Financial Wellness 

    Timely and accurate W-2s and 1099s reduce confusion and frustration for your workforce, and contractors come tax filing time. It is a simple way to reinforce professionalism and care for your people. 

    Key Deadlines You Must Know 

    While deadlines can shift slightly year to year, here are key dates to mark on your calendar as you prepare: 

    • January 31, following the close of the tax year: Deadline to furnish both W-2s and 1099s to recipients, including employees and contractors, and in most cases file with the IRS or Social Security Administration (SSA). 
    • January 31 or early February: Typical deadline to file Forms 1099-NEC and W-2 with the IRS or SSA, whether filed electronically or by mail. 
    • For certain 1099-MISC types, other due dates may apply depending on the type of income and filing method. 

    Tip: Deadlines may fall on weekends or holidays, and the IRS may adjust filing expectations slightly, so always verify the current year’s official guidance. 

    Tax Season Preparation Checklist 

    Getting ahead now can save valuable time and headaches later. Here is what you can start doing today. 

    Gather Worker Information 

    Employees should have completed Form W-4s on file with accurate names, addresses, and Social Security Numbers. Contractors should complete Form W-9s, so you have their legal name, address, and Taxpayer Identification Number. 

    Review Your Payroll Records 

    Double-check total wages paid to employees and payments to contractors to ensure accuracy. Make sure all payments that require reporting are captured in your payroll or accounting system. 

    Confirm Worker Classification 

    Review how each worker is classified as an employee or contractor. The IRS considers factors like behavioral control, financial control, and the relationship between the parties when making determinations. 

    Update Your Systems 

    Now is the best time to verify direct deposit setups, mailing addresses, and payroll data to ensure forms are delivered without delay. 

    Plan for State Filings 

    Some states require additional filings for W-2s or 1099s. Check state requirements and deadlines to remain compliant across all jurisdictions where you operate. 

    How GMS Helps You Prepare and Stay Compliant 

    Preparing for tax season is easier with the right support. GMS helps businesses navigate W-2 and 1099 reporting by combining experienced payroll professionals with technology designed to improve accuracy and reduce compliance risk. 

    Our payroll experts assist with worker classification, payroll data review, and timely federal and state filings, helping businesses avoid costly errors and penalties. With GMS Connect, employee and contractor information is centralized, calculations are automated, and W-2s and 1099s can be securely filed and accessed without last-minute stress.

    Beyond payroll, GMS provides ongoing support across HR compliance, benefits administration, and workforce management. By simplifying administrative responsibilities and keeping compliance on track year-round, GMS helps business owners head into tax season with confidence.  

    Contact us to learn how we can support your business in the new year! 

  • Payroll errors are costly, time-consuming, and damaging to your company’s reputation. From incorrect tax filings to miscalculated wages, even small mistakes can lead to compliance issues and financial penalties. Fortunately, there are a variety of solutions and steps business owners can take to minimize these risks and ensure a smooth and efficient payroll process.   

    Common Payroll Mistakes 

    On average, U.S. businesses pay $4.5 billion annually in Internal Revenue Service (IRS) payroll penalties. Payroll errors often lead to non-compliance with regulations, which quickly turn into an expensive penalty bill. While experts can make a variety of payroll errors, late filing, employee misclassification, and incorrect filings are among the most common.  

    • Missed deadlines: Whether you’re late submitting your weekly payroll or missing a payroll tax deadline completely, these late filings can lead to costly fines and hurt your credibility as an employer.  
    • Misclassification of Employees: Confusing contractors with employees can result in tax and compliance issues. It can also lead to employee distrust, which increases turnover and damages hiring efforts.  
    • Incorrect Tax Withholding: Failing to stay updated on tax laws can lead to underpayment or overpayment, leading to unnecessary expenses and noncompliance risk.  

    Ways to Prevent Payroll Errors 

    While some payroll errors fall through the cracks, there are ways to significantly reduce the risk of mistakes. Continue reading to learn several ways to prevent errors and minimize the risk involved.  

    Automate Where Possible

    Utilizing an automated payroll system is a great way to streamline processes and minimize calculation errors. With payroll software, you can automate overtime, tax, and deduction calculations, saving yourself time and reducing your stress. Payroll software can also improve employee security and flexibility by storing important information in a safe and secure portal. Employees can also access their paychecks, schedule paid time off (PTO), and more.  

    Laws and regulations are changing every day, and it’s important to stay current on payroll and tax laws as they evolve. Missing a law change can lead to noncompliance, resulting in costly penalties and fines. To ensure compliance, regularly visit government tax or labor sites that post law updates or changes, and consult payroll or financial experts on how to implement any changes.  

    Prioritize Documentation 

    When it comes to payroll, it’s important to prioritize employee information. Storing their personal records, such as their social security numbers or bank account numbers, is vital for proper payment and security. By keeping these records safe and easily accessible, you can ensure proper and timely payment for your employees. 

    Regularly Review Information and Processes 

    Technology and employee information change all the time. Employees may move; they might get a raise or close a bank account; it’s important to be aware of any changes so that you can update your records and continue to provide correct and timely payment. If you utilize payroll automation software, it’s important to stay current on software updates or process changes. To avoid any technical difficulties or improper payment, make quarterly checklists focused on verifying employee information, making proper software updates, and reviewing direct deposit amounts.  

    How Group Management Services (GMS) Can Help 

    As a business owner, you didn’t start your company to be buried in direct deposit forms and payroll checks. You started your business to do what you love and find success while doing it. Companies like Group Management Services (GMS) allow you to focus on business growth while taking on the burden of running payroll, ensuring tax compliance, and calculating overtime deductions. GMS’ payroll software is a safe and secure portal that stores employee information and automates processes, so you don’t have to worry about any discrepancies.

    GMS’ team of financial experts can ensure your compliance, whether you operate in one state or multiple. If you have a tax question or are concerned about changing regulations, our team is here to provide guidance and expertise to help your business grow and thrive. To learn more about our payroll services, click here!  

  • In the business world, there are a variety of tax forms and returns that require meticulous attention to detail and timely filing. Failing to meet tax deadlines or filing incorrectly can lead to monetary penalties with interest payments, reputational harm, and the prevention of your company from receiving a business loan, among other consequences.

    Given the variety of tax documents and forms that must be filed by different deadlines, it’s easy to make mistakes or overlook important dates. While there can be consequences for missing a deadline or filing incorrectly, there are solutions available to help reduce any potential reputational damage or financial loss. 

    Common Consequences for Missing Deadlines 

    Monetary penalties 

    Keeping track of tax filing reminders can be challenging, whether you jot them down on your calendar or keep important dates on scattered papers around your office. Mistakes can occur, leading to incorrect tax form submissions or missed deadlines. In most instances, a missed deadline results in monetary penalties for failing to file and pay, which can include interest payments. The Internal Revenue Service (IRS) sets these penalties, and the typical failure-to-file penalty is five percent of the unpaid taxes for each month the payment is overdue, which can go up to a 25% maximum. These penalties can accumulate quickly, impacting your bottom line.  

    Property collection 

    Failing to meet tax deadlines can have serious consequences that extend beyond your financial accounts, affecting your physical property and belongings. If a business or individual does not address their tax debt, the IRS has the authority to collect physical assets, seize bank accounts, garnish wages, and place liens on property. A tax lien limits your ability to obtain credit and grants the government a legal claim to your property. Additionally, the IRS can take further action by denying or revoking your passport. 

    What to Do If You Miss a Deadline 

    If you miss a tax return deadline, there are several ways you can reduce the penalty amount you’d have to pay.  

    File the tax returns as quickly as possible: The sooner you file your tax return, the better. This reduces interest and penalties on the outstanding amount. It can also help lower the risk of paying a late filing penalty.  

    Pay as much as possible: If you aren’t able to pay the full amount of your tax return, pay as much of the amount as you can. This will reduce the amount owed, lowering your penalty and interest amounts.  

    Research: If you have paid your taxes correctly and on time for the past three years, you may be eligible for penalty relief. Research and review the requirements for First Time Abate relief, and make sure to double-check that your return meets all the qualifying criteria before submitting.  

    Tax Compliance Assistance  

    Submitting tax forms and ensuring tax compliance can be complicated, especially for business owners who may lack the time or expertise to manage these responsibilities effectively. Fortunately, there are resources available to assist business owners with tax management. One valuable option is a partnership with a professional employer organization (PEO) like Group Management Services (GMS). 

    GMS simplifies payroll tax management through our streamlined HR and payroll technology. Our payroll software securely stores important employee information, protecting your workforce from potential security risks. Our team ensures accurate tax filing and compliance with federal, state, and local tax laws, giving you peace of mind throughout the year. Safeguard your reputation with efficient, safe, and accurate tax filings by considering a PEO partnership. Discover more about our tax services here!

  • Processing payroll can be an overwhelming and challenging responsibility for business owners. The process is complex, time-consuming, and requires attention to detail in order to avoid errors. While managing payroll is complicated, it can be even more difficult without an automated system to send out pay stubs, calculate deductions, store employee information, and track employee work hours. If you’re uncertain about switching to an automatic payroll system, keep reading to discover four signs that indicate it’s time to implement automatic payroll software. 

    Growing workforce

    As your workforce grows, managing payroll becomes increasingly complex. Juggling multiple paychecks, varying pay schedules, and different deduction amounts can quickly overwhelm you, leading to potential calculation errors and delays. Implementing an automatic system to process employee paychecks will help ensure timely payments, compliance with laws and regulations, and correct payment amounts. It can also streamline your payroll process, saving you time, money, and increasing efficiency.

    Time-consuming process 

    Being a business owner means you constantly have a long list of tasks to manage and deadlines to meet. While processing payroll is a critical responsibility, it can also be very time-consuming, distracting you from developing or growing your business. An automated system can give business owners their time back, reducing the hours spent manually calculating pay stubs, tracking employee hours, and performing other administrative tasks. 

    Frequent errors 

    Manually running payroll leaves your company open to human error. A miscalculation or delay in payment can lead to a variety of problems for the employer and the employee.  While a payroll error is not uncommon, it can be costly. 53% of companies have incurred payroll penalties in the last five years for non-compliance. Mistakes can also lead to unhappy employees, legal issues, and negatively impact your company’s reputation. If your company is consistently making payroll errors, it may be time to consider an automatic option.  

    Lack of security

    Employee information should always be kept safe and secure. Manual systems often involve physical documents and spreadsheets, which can easily be lost, stolen, or accessed by unauthorized individuals. While some business owners may feel safer having the physical documents in front of them, it puts the employer and the employee at greater risk than digitally storing them. Automatic payroll systems have a variety of security measures and capabilities that ensure the safety and privacy of employee records and payroll information.  

    GMS Connect: A Payroll Solution  

    Switching to an automated payroll system can save you time, reduce errors, ensure compliance, and improve employee satisfaction. 

    Group Management Services (GMS) offers GMS Connect, a comprehensive payroll software solution designed to simplify payroll management for business owners. This software streamlines the entire payroll process, from payroll processing and tax management to providing employees with easy access to their payroll information anytime, anywhere.  

    By automating these tasks, GMS’ payroll software reduces the risk of errors, ensures compliance with regulations, and saves valuable time that business owners can redirect towards growing their business. With GMS’ payroll software, business owners can enjoy a stress-free payroll experience and focus on growing their business. 

    Contact us to learn more about how we can help streamline your payroll process! 

  • Even the most organized payroll process can experience occasional hiccups. Whether it’s an underpayment, overpayment, or a tax withholding mistake, payroll errors can affect your employees’ trust and your business’s compliance if not handled quickly and correctly. 

    Here’s what to do when you discover a payroll error and how partnering with Group Management Services (GMS) can help prevent these issues from happening in the first place.

     

    Act quickly and communicate openly 

    Timing is everything. As soon as you discover an error, confirm who is affected and to what extent. Notify the impacted employees promptly, explaining what happened and the steps you’re taking to rectify the issue. Transparent communication helps maintain employee confidence and shows that you take their pay seriously. 

    At GMS, our Payroll Specialists and built-in audit tools in GMS Connect help clients catch discrepancies early, so most issues are resolved before payroll is finalized. 

    Find out why it happened 

    After you identify the mistake, dig into the root cause. Was it a simple data entry issue? A misclassified employee? An outdated pay rate? Understanding what went wrong helps you put safeguards in place to stop it from happening again. GMS guides clients through complex payroll compliance areas, such as employee classification and benefits deductions, so they can focus on running their business without worrying about hidden payroll pitfalls. 

    Correct the error carefully 

    Once you know the cause, fix the numbers promptly and accurately. For underpayments, issue an off-cycle payment as soon as possible. For overpayments, work with the employee to arrange repayment that follows federal and state wage laws. If the mistake involves taxes, adjust your payroll records and file any necessary amendments. 

    GMS handles these corrections on behalf of our clients, ensuring that payments and tax filings remain compliant and accurate. 

    Document everything 

    Keep a clear paper trail of what happened, when the mistake was discovered, how it was fixed, and any communication with employees. Documentation protects your business during audits and helps resolve any future questions that may arise. With GMS, all payroll changes, adjustments, and reports are securely stored, ensuring you always have the necessary records. 

    Strengthen your payroll process moving forward 

    Transform mistakes into learning opportunities by reviewing payroll workflows and incorporating checks, such as approval processes or automated alerts. Investing in modern payroll software or working with a payroll partner can significantly reduce human error. 

    At GMS, we combine advanced payroll technology with experienced payroll professionals to give businesses confidence in every payroll run. We’re not just processing payroll; we’re building proactive strategies that keep your business compliant, and your employees paid accurately and on time. 

    Payroll errors don’t have to define your business 

    By acting quickly, remaining transparent, and learning from past mistakes, you can rectify errors and safeguard your team’s trust. But the best strategy is prevention. Partnering with GMS means more than handing off payroll tasks. It means gaining a team dedicated to accuracy, compliance, and continuous improvement, so your business can focus on growth instead of payroll headaches. 

    Our online payroll software, GMS Connect, gives you the ability to complete payroll in minutes as well as manage and access payroll information anywhere there’s an internet connection. Additionally, our payroll software integrates with other platforms, enabling us to calculate and apply deductions for health insurance and other employee benefits seamlessly. Ready to see how GMS can make payroll simpler and more reliable? Contact us today to learn more. 

  • Technology is constantly changing in today’s workplace environment. New technology innovation impacts how employees communicate, collaborate, and work more efficiently. Technology is associated with every aspect of your business, from recruiting and hiring to payroll. Payroll has remained largely immune to innovation.

    Importance Of Payroll Technology

    Payroll software helps in the process of calculating and processing employee taxes, meeting regulations, tracking work hours, employee benefits, and much more. Implementing a process of this nature will allow you to stand out from your competitors.

    As a business owner, your time is essential. The time saved during the payroll process using an automated system can be spent accelerating other areas of your business. The following are the benefits of payroll technology:

    • Track work hours accurately 
    • Save time and money
    • Provide more control over confidential business information
    • Automate payroll tax calculation and filing

    In addition, payroll software gives employees more control and access to their employee portals, allowing them to see their paystubs. As more and more companies have introduced software of this kind in their business, they’ve noticed fewer payroll errors which have ultimately reduced the costs and administrative work for payroll teams.

    Improve Your Payroll Processing Now

    Research shows us that it takes only a few paycheck errors for an employee to look for a new position elsewhere. It’s imperative that you take the proper steps to ensure you don’t lose quality talent to an error that could have been avoided. By partnering with GMS, we can save you time and give you peace of mind through our online payroll software, GMS Connect. Stop worrying about payroll and let us take on the responsibility. Get a quote today.

  • In a move to promote wage equity and improve transparency in the hiring process, the City of Cleveland passed a new pay equity ordinance that imposes salary disclosure requirements and restricts the use of salary history in hiring decisions. The ordinance was signed into law by Mayor Justin Bibb on April 28, 2025, and is scheduled to take effect six months later, giving employers time to prepare. 

    Who Must Comply 

    The ordinance applies to employers with 15 or more employees operating within the City of Cleveland. This includes private employers, as well as city contractors and vendors who provide services to the city. Importantly, the law focuses on positions that are physically located in Cleveland, even if the broader organization operates outside the city limits. Remote positions may also fall under this ordinance if they are tied to a Cleveland-based office or if the employer is headquartered in the city. 

    Covered Individuals 

    The ordinance covers job applicants and employees working in Cleveland. It is designed to protect individuals applying for new positions, promotions, or transfers within organizations that fall under the ordinance’s scope. 

    Key Requirements for Employers 

    Employers who are covered by this new ordinance must adhere to two core obligations: 

    1. Salary range disclosure: Employers are now required to disclose the salary range or pay scale for any open position in job postings. This range must reflect what the employer reasonably expects to pay for the position, taking into account internal compensation structures and market rates. This applies to postings for new roles, internal promotions, and transfers.
    2. Ban on salary history inquiries: Employers may no longer request or rely on an applicant’s wage or salary history when making hiring decisions. That means removing questions about prior compensation from applications, interviews, and background checks. Employers also cannot retaliate against applicants who choose not to disclose their salary history voluntarily. 

    Why This Matters 

    Pay transparency laws are part of a growing national movement to close gender and racial wage gaps. Historically, basing offers on past salary can perpetuate inequities, especially for women and people of color. By requiring employers to publish salary ranges and disregard salary history, Cleveland’s ordinance seeks to level the playing field for all job seekers. 

    Steps Employers Should Take Now 

    With the ordinance taking effect in late 2025, employers have a limited window to get their processes in order. Here are key steps to consider: 

    • Review and update job postings: Ensure every job listing includes a legitimate and reasonable salary range that reflects internal standards and market data. 
    • Eliminate salary history questions: Remove any questions about previous compensation from applications, interviews, and screening processes. Update related templates and forms accordingly. 
    • Revise internal policies: Update employee handbooks, hiring policies, and manager training materials to align with the ordinance. Clear guidance helps ensure compliance across all levels of the organization. 
    • Train HR and hiring teams: Provide focused training on the ordinance to recruiters, managers, and anyone involved in the hiring process so they understand what can and cannot be asked. 

    How GMS Can Support Compliance and Recruiting Success 

    Cleveland’s new pay equity ordinance is part of a larger trend taking hold across the country. From California to New York, and now right here in Ohio, more cities and states are adopting salary transparency laws and restricting the use of salary history in hiring. For employers, this means staying compliant isn’t just a one-time effort; it’s an ongoing process that requires attention to local, state, and federal employment regulations. 

    At Group Management Services (GMS), we support businesses nationwide by helping them navigate complex and evolving compliance requirements, no matter where they operate. Whether you’re hiring in Cleveland, Chicago, or across multiple states, we can help you: 

    • Craft legally compliant and competitive job descriptions 
    • Update employee handbooks to reflect city- or state-specific mandates 
    • Align recruitment strategies with pay transparency laws 
    • Train your HR and hiring teams to follow best practices and avoid risk 

    Don’t let local ordinances catch you off guard. With GMS as your partner, you can focus on growing your business while we handle the heavy lifting of compliance everywhere you hire. 

  • Managing a business comes with many moving parts, and two of the most critical functions are payroll and human resources (HR), which often operate in separate systems. This separation can lead to inefficiencies, data discrepancies, and administrative headaches. However, by integrating payroll with HR, businesses can streamline operations, improve data accuracy, and enhance the overall employee experience. 

    In today’s fast-paced business environment, leveraging an integrated payroll and HR system like a Human Resources Information System (HRIS) can help companies simplify workforce management while staying compliant with labor laws and payroll regulations. Let’s explore the benefits of integration, key considerations, and how your business can successfully implement a unified system. 

    The Benefits of Integrating Payroll with HR 

    Improved data accuracy and compliance

    Keeping payroll and HR data in separate systems increases the risk of human error, such as duplicate entries, miscalculations, or outdated employee records. An integrated system ensures that data flows seamlessly between payroll, benefits, time tracking, and employee records, reducing manual data entry and improving accuracy. 

    • Reduces payroll errors that could result in compliance violations or wage disputes
    • Ensures tax withholdings, benefits deductions, and overtime calculations are precise
    • Keeps businesses aligned with state and federal labor laws by automatically updating compliance regulations

    With GMS Connect, our cloud-based HRIS, businesses benefit from real-time data updates, reducing compliance risks and payroll discrepancies. 

    Increased efficiency and time savings

    Manual payroll processing and HR administration take up valuable time that could be spent on strategic initiatives. By automating these functions through an integrated system, businesses can eliminate redundant tasks, reduce paperwork, and optimize workforce management.  

    • Automating employee onboarding, ensuring payroll and benefits enrollment happen simultaneously
    • Syncing time-tracking data with payroll, reducing processing time, and ensuring employees are paid accurately
    • Generating reports quickly, giving HR and finance teams a clearer picture of labor costs and workforce trends

    Enhanced employee experience

    A well-integrated payroll and HR system simplifies administrative tasks for employees, improving engagement and satisfaction. Employees can access their payroll information, benefits, and HR documents through a single self-service portal. 

    • Easy access to pay stubs, tax forms, and benefits information
    • Streamlined paid time off (PTO) requests and approvals, ensuring accurate payroll processing
    • Faster issue resolution with automated workflows and HR support in one place

    With GMS Connect, employees have 24/7 access to their payroll and HR information, empowering them to manage their own data without waiting on HR. 

    Cost savings and better financial planning

    By eliminating redundancies and improving efficiency, businesses can reduce administrative costs associated with payroll processing and HR management. Additionally, integrated payroll and HR systems provide better workforce insights, allowing companies to make data-driven financial decisions. 

    • Minimizes costs associated with payroll errors, compliance penalties, and inefficiencies
    • Provides real-time labor cost analytics to optimize budgeting and staffing decisions
    • Reduces reliance on third-party payroll processors or outdated manual systems

    How to Successfully Integrate Payroll and HR 

     

    Choose the right technology: Invest in a robust HRIS that integrates payroll, HR, benefits administration, and compliance management. GMS Connect offers an all-in-one solution designed to simplify workforce management for businesses of all sizes.

    Ensure a smooth data migration: Migrating from separate payroll and HR systems requires careful planning. Work with an experienced provider like GMS to transfer data securely, ensuring accuracy during the transition.

    Train your HR and payroll teams: To maximize the benefits of integration, your HR and payroll teams need proper training. GMS provides dedicated customer support to help businesses navigate system implementation and optimize usage.

    Communicate with employees: Inform employees about the new system and how it will improve their access to payroll and HR information. Offer training sessions or user guides to help them navigate the new platform. 

     

    Streamline Your Business with GMS Connect 

    Integrating payroll with HR is no longer a luxury; it’s a necessity for businesses looking to improve efficiency, compliance, and employee satisfaction. With GMS Connect, you can unify your HR and payroll functions, reduce administrative burdens, and focus on growing your business. 

    Ready to see how integration can transform your business? Request a demo of GMS Connect today!