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  • As we move into 2025, businesses across the U.S. face changing minimum wage requirements, with 23 states and Washington, D.C., implementing increases. Inflation adjustments, pre-scheduled state laws, and voter-approved initiatives primarily drive these changes. Here’s a comprehensive overview of the updates and what they mean for employers. 

    The Federal Minimum Wage 

    The federal minimum wage remains $7.25 per hour. While this serves as a baseline, 30 states and Washington, D.C., set higher minimum wages, often tying increases to inflation or cost-of-living adjustments. However, 20 states still default to the federal rate, emphasizing the disparity in wage standards across the country. 

    State-by-State Updates For 2025 

    • Significant increases: States such as Michigan will see substantial increases due to legal rulings and voter measures. Michigan’s wage will rise from $10.56 to $12.48 in February of 2025, reflecting a 20% jump. 
    • Modest adjustments: States like Montana and Ohio will experience smaller increases of $0.25, with rates reaching $10.55 and $10.70, respectively. 
    • Top rates: Washington State leads with a minimum wage of $16.66, followed by California at $16.50 and Connecticut at $16.35. Washington, D.C., is expected to raise its already high rate of $17.50 based on cost-of-living adjustments midyear. 
    • Regional variations: States like Oregon and New York apply regional minimum wages, creating differing rates within state boundaries. For example, in Oregon, wages range from $13.70 in rural areas to $15.95 in the Portland metro area. 

    These updates highlight the growing complexity of minimum wage compliance, especially for businesses operating across multiple states. 

    Challenges For Remote And Multistate Teams 

    The rise of remote work adds another layer of complexity. Employers must account for the minimum wage laws in the state where each remote worker resides, even if the business operates elsewhere. For instance, a company headquartered in a federal minimum wage state may need to comply with California’s $16.50 rate for its remote employees. 

    Implications For Employers 

    • Payroll adjustments: Employers must update payroll systems to reflect the new rates and ensure timely compliance. 
    • Budgeting: Wage increases may impact labor costs, requiring adjustments in pricing strategies or workforce planning. 
    • Compliance risks: Noncompliance can lead to legal and financial penalties, particularly in states with rigorous enforcement mechanisms. 

    How GMS Can Help 

    Navigating minimum wage changes and maintaining compliance is a significant challenge, particularly for businesses managing remote teams or operating in multiple states. Group Management Services (GMS) offers comprehensive payroll and HR solutions, helping businesses: 

    • Track and implement state-specific wage changes: Our tools ensure your payroll remains compliant, no matter where your employees are located. 
    • Streamline multistate compliance: We simplify managing wage laws across jurisdictions, minimizing administrative burdens. 
    • Enhance workforce planning: Our expert advisors assist in budgeting for wage increases and optimizing labor costs. 

    By staying informed and partnering with experts like GMS, your business can adapt to these changes efficiently, ensuring compliance and protecting your bottom line. 

  • Illinois employers with 15 or more employees will soon be required to openly share pay scales and benefits in job postings.

    On January 1, 2025, amendments to Illinois’ Equal Pay Act of 2003 will take effect, placing new responsibilities on employers and employment agencies operating in the state. These changes are part of a broader push toward wage transparency and fairness, and they will impact how businesses recruit, retain, and compensate their workforce. In addition to pay scale and benefits disclosure, the law also strengthens recordkeeping requirements and outlines a new process for dealing with complaints.

    Whether you’re a small local business or a larger multi-state operation, these new rules represent a shift in how you communicate with potential hires and engage with current employees. Let’s break down the key points.

    A Closer Look At The New Requirements

    Mandatory pay transparency in job postings

    For employers with 15 or more employees, pay scales and benefits must be included in all specific job postings. This could be a wage or salary range, along with details about benefits like bonuses, stock options, health coverage, and other forms of compensation. Employers can reference a pay scale set by market data, internal pay ranges, or a previously established budget for the position.

    Promotion postings for internal candidates

    The law also requires employers to announce promotion opportunities internally no later than 14 days after making an external job posting. By doing so, the state aims to encourage fair, equitable access to advancement within organizations.

    Recordkeeping obligations

    Employers must maintain documentation on wages, job postings, and associated pay scales and benefits for five years. This ensures that if questions arise (from employees or regulators) you’ll have the records to show you’ve followed the rules.

    Complaint and enforcement mechanisms

    Employees, and in some cases job applicants, can file complaints if they believe there’s been a violation of the Equal Pay Act or the new requirements. The Illinois Department of Labor (IDOL) can investigate, and if it finds violations, issue penalties. These fines can escalate up to $10,000 for repeated offenses.

    Why These Changes Matter

    Promoting trust and fairness

    Transparency around pay and benefits can build trust with both current employees and potential hires. It sends a clear signal that:

    • You value fairness
    • You have nothing to hide
    • You’re committed to creating a level playing field

    This sort of openness can translate into better employee morale, stronger retention, and a more attractive employer brand.

    Staying ahead of regulatory trends

    Illinois is not alone in pursuing pay transparency measures. Many states and jurisdictions are adopting similar requirements. Being proactive in Illinois may give you a head start if you operate or expand into other states with comparable laws. Beyond pure compliance, embracing transparency now shows that you’re on the cutting edge of best practices in HR and compensation management.

    Avoiding financial risks

    Non-compliance could result in significant penalties. Beyond that, there’s also the potential reputational damage. Employees and job candidates can easily learn about infractions that appear in public records. Being proactive helps shield you from such setbacks.

    Practical Steps To Prepare

    1. Review and update pay scales

    If you haven’t established formal pay scales or if your current ranges are outdated, now’s the time to get organized. Set clear criteria for determining pay ranges-consider market data, industry standards, and geographic factors. Document these criteria and ensure consistency.

    1. Examine your benefits offerings

    The new law requires not just pay information, but also a “general description” of the benefits and other compensation offered for each position. Make sure you can clearly articulate what you provide, such as:

    • Health insurance options
    • Retirement plans
    • Bonuses
    • Paid time off (PTO)
    • Other perks

    Have a system to keep this information current as offerings evolve.

    1. Adjust your job posting processes:

    Build compliance into your recruitment workflow. Before posting a job, confirm that the pay scale and benefits information is accurate and up to date. If you work with a third-party recruiter or job board, ensure they have the necessary details.

    1. Strengthen your recordkeeping:

    of all job postings, pay ranges, benefits information, and employee wage data. Since you’ll need to retain this documentation for at least five years, consider implementing a reliable HR information system (HRIS) or leveraging an external partner to streamline these tasks.

    Looking Ahead

    As we approach January 1, 2025, the clock is ticking for Illinois employers to adapt. Navigating the new Illinois pay transparency requirements can feel overwhelming, especially when you’re already juggling countless HR responsibilities. That’s where Group Management Services (GMS) comes in. When you partner with GMS you get:

    • Compliance guidance: We can help clarify the new Illinois requirements and show you how they fit into your current HR strategy.
    • Efficient recordkeeping: We’ll help implement systems that keep all the necessary information at your fingertips, reducing stress when it’s time to prove compliance.
    • Training and support: Need help educating your team or ensuring that your posting and promotion processes meet the new rules? GMS can provide the resources, tips, and best practices you need to ensure everything is aligned.
    • Integrated payroll and benefits administration: GMS integrates payroll and benefits into a cohesive system. This integration ensures accurate pay data, easy updates to employee compensation, and clear, accessible benefits information for current and prospective employees.

    Ready to prepare your business for Illinois’ upcoming law changes? Contact GMS today to learn how we can help you stay compliant and thrive in an evolving regulatory landscape.

     

     

  • The U.S. Department of Labor (DOL) has announced a proposed rule to phase out the distribution of certificates that allow employers to pay certain workers with disabilities less than the federal minimum wage of $7.25 per hour. The rule proposes to gradually eliminate certificates that employers can apply for under Section 14(c) of the Fair Labor Standards Act (FLSA), which allows them to pay subminimum wages to certain workers with disabilities. For nearly a century, it has been legal in the U.S. to pay some individuals with disabilities below the minimum wage. Currently, about 40,000 American workers fall into this category, with some earning as little as 5 cents an hour. 

    Key Details Of The Proposal 

    • Phase-out timeline: If adopted, new 14(c) certifications will no longer be issued. Existing programs will be phased out over three years starting from the final rule’s effective date. 
    • Legal and political challenges: The proposal must navigate public commentary, possible legal hurdles, and political opposition before becoming finalized. 
    • Economic and workplace impacts: Employers and advocacy groups have debated the implications, with some fearing fewer opportunities for workers with disabilities and others emphasizing the need for equity in the workplace. 

    What’s Next? 

    The DOL is currently seeking public feedback on the proposal. Employers should monitor these developments closely to prepare for potential regulatory changes. If finalized, businesses employing workers under 14(c) must reevaluate their wage practices and compliance strategies. 

    How GMS Can Help 

    Navigating evolving employment regulations can be challenging. Group Management Services (GMS) specializes in helping businesses stay compliant with labor laws, including wage and hour rules. From workforce management to payroll processing and compliance guidance, GMS provides the expertise and tools you need to adapt to regulatory changes while supporting your employees. Contact us today to learn how we can help your business stay compliant. 

  • On November 15, 2024, the U.S. District Court for the Eastern District of Texas issued a ruling that vacated the Department of Labor’s (DOL) recent changes to overtime salary thresholds. This decision, effective nationwide, has significant implications for employers navigating wage and hour compliance under the Fair Labor Standards Act (FLSA). 

    The overturned rule, finalized on April 23, 2024, proposed the following changes to the salary threshold for exempt employees (those not entitled to overtime pay): 

    • Raising the salary threshold from $684 per week ($35,568 annually) to $844 per week ($43,888 annually), effective July 1, 2024. 
    • Further increasing the threshold to $1,128 per week ($58,656 annually), scheduled for January 1, 2025. 

    However, with the court’s recent decision, employers no longer need to implement these increases. 

    Key Points From The Court’s Decision 

    The court’s ruling centers on the DOL’s authority to set salary thresholds for overtime exemptions. While the FLSA allows the DOL to define and delimit exemptions for bona fide executive, administrative, and professional (EAP) employees, the court found that the 2024 rule overstepped this authority. Specifically, the rule’s high salary thresholds were seen as overshadowing the duties-based test required to determine exemption status. 

    In a related case earlier in 2024, the Fifth Circuit Court of Appeals emphasized that while salary can serve as an objective measure for exemption, it must not replace the primary consideration of job duties. The District Court echoed this sentiment, concluding that the 2024 rule’s salary increases effectively nullified the duties-based exemption criteria. 

    What’s Next? 

    The DOL may appeal the decision but given the court’s reasoning and the upcoming change in presidential administration, the likelihood of the rule’s revival appears slim. For now, the pre-2024 thresholds remain in place: 

    • A salary threshold of $684 per week ($35,568 annually) for exempt EAP employees. 
    • A highly compensated employee (HCE) threshold of $107,432 annually. 

    Staying updated on these developments as the situation evolves is critical for employers to ensure compliance and minimize disruptions. 

    Navigating Compliance Amid Uncertainty 

    The court’s ruling highlights the ongoing challenges businesses face in maintaining compliance with labor laws. Wage and hour regulations frequently change, making it essential for employers to stay informed and prepared. 

    At Group Management Services (GMS), we understand the complexities of workforce management. Our team of HR experts work closely with businesses to navigate regulatory changes, ensuring compliance and reducing administrative burdens. From policy updates to payroll management, we offer comprehensive solutions tailored to your needs. Contact us today to learn how we can help your business thrive. 

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

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

    2025 Tax Bracket Overview 

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

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

    Standard Deduction And Personal Exemptions 

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

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

    Additional IRS Adjustments 

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

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

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

    What Your Employees Should Know 

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

    What This Means For Business Owners 

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

    Preparing For The Adjustments 

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

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

    How GMS Can Help With Tax Compliance 

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

  • On July 17th, the Internal Revenue Service (IRS) announced that some amended employment tax returns can be electronically filed using the Modernized e-File program.  

    The Modernized E-File (MeF) Program 

    MeF is a web-based system that allows electronic filing of tax returns. E-filing saves time and money. When taxes are e-filed, whether it be for businesses, professionals, or individuals, the data is directly transmitted online from the e-filer’s servers to the tax agency’s servers.  

    The MeF program provides electronic filing and payment options for filers of corporation, employment tax, estates and trusts, excise tax, exempt organization, individual, partnership, and withholding tax returns. Learn more about these returns here. 

    Amended Returns That Can Now Be E-Filed 

    The following amended employment tax returns can now be e-filed: 

    • Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return 
    • Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund 
    • Form 943-X, Adjusted Employer’s Annual Federal Tax Return for Agricultural Employees or Claim for Refund 
    • Form 945-X, Adjusted Annual Return of Withheld Federal Income Tax or Claim for Refund 

    Note: MeF cannot be used yet to e-file Form 944-X, Adjusted Employer’s Annual Federal Tax Return or Claim for Refund, or Form CT-1 X, Adjusted Employer’s Annual Railroad Retirement Tax Return or Claim for Refund. 

    About Form 940 

    Use Form 940 to report your annual Federal Unemployment Tax Act (FUTA) tax. Workers who have lost their jobs can receive unemployment compensation through the FUTA tax and state unemployment tax systems. Employers typically pay both federal and state unemployment taxes. Only employers pay the FUTA tax; your employee’s wages should not be subject to it. 

    About Form 941-X 

    Use Form 941-X to correct errors on a Form 941 that you previously filed. Form 941 is used to report both federal income taxes and Federal Insurance Contributions Act (FICA) taxes, the latter of which includes Medicare tax and Social Security tax. 

    About Form 943-X 

    Use Form 943-X to correct errors on a previously filed Form 943. Form 943 is a tax form used to report federal income tax, Social Security, and Medicare withholdings from agricultural employees. 

    About Form 945-X 

    Use this Form 945-X to correct administrative errors only on a previously filed Form 945. If the federal income tax you reported on Form 945 (including backup withholding) differs from the amount withheld from payees, you have committed an administrative error. 

    Use Form 945 to report withheld federal income tax from nonpayroll payments. Nonpayroll payments include: 

    • Pensions (including distributions from tax-favored retirement plans, for example, section 401(k), section 403(b), and governmental section 457(b) plans), and annuities 
    • Military retirement 
    • Gambling winnings 
    • Indian gaming profits 
    • Voluntary withholding on certain government payments 
    • Backup withholding 

    GMS Helps Keep Your Business Compliant 

    Staying compliant with the ever-changing landscape of tax and payroll regulations can be daunting for any business owner. With GMS, you can skip the manual work and focus on what truly matters—growing your business. Our expert team is dedicated to keeping you informed about new laws and regulations, ensuring your business remains compliant without the hassle. Let us handle the complexities of payroll and tax management. Contact us today to learn how GMS can support your business and simplify your operations! 

  • Onboarding new employees is an exciting time, but there are important compliance requirements to handle as well. The first order of business should be having your new hire complete a Form W-4. 

    What Is Form W-4 And Why Is It Important? 

    Form W-4 allows employees to determine how much federal income tax should be withheld from their paycheck each pay period. This ensures they don’t receive a huge tax bill when filing their annual return. The Internal Revenue Service (IRS) calculates how much tax to withhold based on the withholding information each employee indicates on their Form W-4. The IRS also considers whether employees are filing jointly or independently. 

    The amount of withholding depends on the following factors: 

    • Filing status (single, married, or head of household) 
    • Number of dependents 
    • Other jobs or income sources 
    • Anticipated deductions and credits 

    Employees have access to helpful tools, such as the IRS tax withholding estimator. This tool can assist them in determining the proper withholding allowances to claim on their Form W-4. 

    Employer Responsibilities 

    As the business owner, you cannot fill out Form W-4 for your employees or influence how they complete it. If an employee doesn’t submit this form, the IRS requires you to withhold taxes from them at the highest rate (which your employees won’t be happy about). However, you do need to do the following: 

    • Provide your business’s Employer Identification Number (EIN) 
    • Note the employee’s hire date 
    • Enter your company name and address 
    • Calculate the withholding amount based on the employee’s W-4 inputs 

    It’s a good practice to remind employees to update their Form W-4 anytime they have a major life change, such as getting married, having a child, or gaining another income source. This ensures proper withholding throughout the year. 

    If your employee didn’t claim all the allowances they were entitled to, their employer cannot repay the tax previously withheld, but the employer should ensure the employee fills out a revised Form W-4 to correct the amount moving forward.  

    Let GMS Handle Form W-4 Compliance 

    Keeping up with Form W-4 rules and properly withholding taxes for all employees can be an administrative burden. That’s where GMS comes in. As a professional employer organization (PEO), we take on full responsibility for payroll tax compliance, including: 

    • Collecting and processing Form W-4’s 
    • Calculating precise withholding amounts 
    • Filing quarterly and annual payroll tax returns 
    • Remaining up to date on changing regulations 

    This allows your team to focus on your core business operations while resting assured your payroll taxes are being managed accurately and on time. At GMS, we understand the challenges of remaining payroll tax compliant, especially when managing Form W-4s across a workforce. Our PEO services provide a comprehensive solution, ensuring proper withholdings and filings so you avoid penalties and audits. Contact us today to learn how our services can save you time and money while reducing risk! 

  • The complex calculations, meticulous record-keeping, and strict regulations make payroll a daunting task. As a small business owner, you’re already juggling numerous responsibilities, from managing daily operations to strategizing for growth. Using your valuable time on payroll can divert your attention from what’s most important – building your business.

    Streamlining payroll processing can help you reclaim your time while also ensuring your employees are paid accurately and on time. Integrated payroll services combine payroll processing with other essential business functions, such as HR and benefits administration. With integrated payroll processing, you can reduce administrative burdens, maintain compliance with tax and labor laws, and boost efficiency.

    The Challenges Of Payroll Management For Small Businesses

    Payroll management can be challenging for small business owners, impacting productivity and financial health. Manual calculations and record-keeping are tedious tasks that take up valuable time and resources.  That time adds up quickly, highlighting the substantial burden these processes can inflict.

    Not only are manual calculations time-consuming, but they can also lead to filing errors and compliance issues. Human errors in payroll processing can lead to serious consequences, including legal penalties and upset employees. In fact, 40% of small to mid-sized businesses are penalized by the Internal Revenue Service (IRS) due to inaccuracies in their payroll filings, incurring fines costing around $845. These complex regulations require extensive knowledge and attention to detail, as minor errors can be expensive.

    What Are Integrated Payroll Services?

    Integrated payroll services go beyond traditional payroll processing by also covering other critical business operations. This could include HR management for employees, timekeeping systems for accurate hour tracking, and benefits administration for health insurance and retirement plans. These comprehensive services consolidate all aspects of employee management into one system, eliminating the need for multiple platforms and reducing manual data entry. By integrating payroll with HR and other functions, businesses can save time and resources while enhancing accuracy.

    The Benefits Of Integrated Payroll Services

    Small businesses can gain significant advantages from integrated payroll solutions. From automating calculations to ensuring compliance, integrated payroll systems streamline payroll processing and simplify administrative tasks. You can expect the following when you utilize an integrated payroll service:

    Time savings

    When you use an integrated payroll service, you can save time and effort in managing payroll tasks. reducing the time spent on manual calculations. Data entry and processing are streamlined into a single platform, increasing operational efficiency. Integrated payroll services also provide real-time updates and reporting, allowing you to make swift decisions regarding your business and employees.

    Increased accuracy and compliance

    Integrated payroll greatly enhances accuracy and compliance in payroll management. By automating tax calculations and filings, these systems ensure that deductions and contributions are calculated correctly and submitted on time, reducing the risk of errors. Furthermore, integrated payroll services are designed to stay up to date with federal, state, and local regulations. This helps you remain compliant with the latest legal standards and protects your business from penalties and fees.

    Simplified HR management

    Alongside optimizing payroll, integrated payroll services incorporate crucial HR functions into the same system, simplifying HR management. Integrated payroll assists in facilitating data collection and employee benefits enrollment, making onboarding new hires a smooth process. They also improve the accuracy of time and attendance tracking by automatically recording work hours, leaves, and overtime. With combined systems, employees can easily manage their health insurance plans, retirement contributions, and other benefits, streamlining benefits administration.

    Cost efficiency

    Helping businesses save time and resources, integrated payroll services ultimately reduce overall expenses. By simplifying payroll and HR processes with automations, these systems minimize administrative overhead and reduce the need for dedicated payroll staff. With the accuracy of integrated payroll, businesses can also mitigate the risks of costly penalties due to human error. You can also adjust your integrated services based on the growth of your business, easily adding or removing features as needed without incurring extra costs.

    Enhanced employee experience

    Integrated payroll services aren’t just a great tool for business owners; they also provide numerous benefits for employees. Self-service portals allow employees to access their pay stubs, tax forms, and other important documents. Having this information provided transparently and readily available builds trust and limits the need for manual requests and inquiries.  Additionally, integrated payroll services can improve communication between employees, HR, and payroll departments by centralizing payroll and benefits information.

    What To Look For In An Integrated Payroll Service Provider

    Choosing the right integrated payroll service provider for your business requires careful consideration. An integrated payroll system should smoothly fit into your current operations, making it simpler and more efficient. Look out for the following features when searching for an integrated payroll service that suits your needs:

    • Automation and integration: The integrated payroll service you select should automate payroll processing, tax filings, and other HR tasks. It should also easily communicate data with your other tools or systems.
    • Compliance tools: Your integrated payroll system should receive automatic tax updates and have built-in compliance features for adhering to regulations and audits.
    • Employee self-service portals: Employees should be able to access paystubs, tax information, and benefits through a user-friendly self-service portal that lets them update personal details.
    • Flexibility for growth: As your business grows, your integrated payroll solution should also adapt, allowing you to adjust services as your needs evolve.

    How To Implement Integrated Payroll

    Once you’ve found the perfect fit for your business, begin integrating your new payroll system by planning and communicating the transition to your employees. Start by establishing a clear transition timeline and secure technical support to encourage an efficient rollout of your new integrated payroll system. Next, consider how your existing data will be migrated to the new integrated system. Your new service provider can help facilitate a smooth and accurate transfer of employee and payroll information. Additionally, ensure your employees are comfortable with the new system by providing training sessions that familiarize your team with the self-service portal and other functions.

    Payroll Management With GMS

    Managing payroll and keeping up with tax regulations can be a complex and time-consuming task for small business owners. A professional employer organization (PEO) like GMS can turn the burden of payroll management into a strategic advantage with our integrated HR solutions.

    GMS Connect, our fully integrated HR information system (HRIS) offers access to tools for payroll, benefits, HR, recruiting, performance management, and more. With GMS Connect, you can manage your business’s payroll and HR functions from anywhere, on any device with internet access.

    Our payroll processing services include a user-friendly online system for , streamlining your workflow. Once you input your payroll data, GMS experts handle all the details associated with filing taxes, from ongoing maintenance to compliance. Contact us today to transform your payroll management and HR operations!

  • Compensation is a hot topic for both employers and employees, encompassing everything from minimum wage debates to comprehensive benefits packages. As an employer, meeting your staff’s needs and expectations can be challenging, especially when balancing your payroll budget. However, by implementing certain strategies, you can effectively manage your total payroll cost while still maintaining a competitive edge.

    The job market is constantly changing, and with that, employees’ expectations have also shifted. They now demand not just competitive pay but also respect, recognition, and a higher quality of life outside the office. As an employer, you have the power to positively influence their overall well-being and job satisfaction by addressing these broader concerns. This makes their positions more appealing in the long term and shows your commitment to their welfare.

    Compensation can be stressful to navigate; with limited budgets, it might be difficult to offer competitive salaries to your team. However, because today’s employees are looking for more than fair wages, we’ve gathered a variety of non-monetary ways you can boost your retention and recruitment efforts. When implemented effectively, these strategies can lead to a more engaged and satisfied workforce.

    Do Non-Monetary Benefits Matter?

    Happy employees are 20% more productive than unhappy employees. Non-monetary benefits are one way you can help boost employee morale, engagement, and overall satisfaction. Though it can take a bit of effort upfront to get these programs up and running, they can save you time and money once integrated into your work operations. The impact on employee productivity and satisfaction is well worth the investment.

    Employee turnover can significantly undermine team morale, productivity, and the quality of work. Moreover, the time and financial costs involved in hiring a replacement are substantial—often exceeding 24 days to fill a position and costing up to 33% of an employee’s annual salary. Implementing non-monetary benefits alongside a livable wage can effectively reduce turnover, fostering a more stable and engaged workforce.

    In addition, non-monetary benefits are of little to no cost to you as an employer. Once up and running, these benefits often maintain themselves with minimal ongoing expenses. Offering such benefits can create a more fulfilling work environment, encouraging employees to stay longer with your company. This approach not only reduces the frequency and costs associated with turnover but also builds a reputation for your company as a caring and desirable place to work.

    Non-Monetary Benefit Examples

    Ensuring employees are content and motivated extends beyond providing a living wage. Younger generations (Millennials and Gen Z) specifically prioritize meaningful work, positive culture, and work-life balance over traditional incentives. As an employer, it’s crucial to understand these changing needs and expectations. While it’s still necessary to consider monetary compensation, there are several options that can help boost employee engagement, productivity, recruitment, and retention:

    • Flexible work arrangements: Options such as remote work, flexible schedules, and compressed workweeks allow employees to effectively balance their personal lives with professional responsibilities. Generate a policy that works for your team, with set expectations around project completion and core operating hours. Include potential repercussions if the policy is abused, work goes unfinished, or remote employees are unreachable during core hours.
    • Health and wellness programs: These can include gym memberships, mental health days off, and recreational activities. Even if some team members don’t utilize these benefits, offering and encouraging them can help boost employee engagement and satisfaction.
    • Professional development: Offering tuition reimbursement, access to courses, workshops, and seminars, and opportunities for upward mobility within your company can motivate employees to stay long-term. Not only does this show investment in your team’s professional growth, but often, what they learn can be brought back and help your business grow.
    • Recognition and reward systems: Implementing peer recognition programs or performance-based awards can boost morale and encourage a productive workplace culture. Fostering a culture of appreciation gives employees a sense of belonging, which helps increase overall job satisfaction.
    • Financial well-being programs: These programs could include financial planning services, retirement planning sessions, and workshops on budgeting and economic health, helping employees feel more secure about their financial future.
    • Student loan repayment assistance: Given the rising concern over student debt, offering help with student loan repayments can be a significant relief for younger employees, making your business much more attractive to this demographic.
    • Time for volunteering or passion projects: Offering your team time off, specifically for volunteer work or to spend on a project they’re passionate about, is a simple but effective benefit. As younger generations are more motivated by meaningful work, giving them a few days a year or hours per month to dedicate to projects can lead to a more engaged and content team.
      While some of these tools, such as a gym membership or student loan assistance, will require a small budget, they can often be cheaper than offering your whole team higher salaries than other companies.

    While some of these tools, such as a gym membership or student loan assistance, will require a small budget, they can often be cheaper than offering your whole team higher salaries than other companies.

    Implementing Non-Monetary Benefits

    When rolling out new company-wide initiatives, anticipate some initial challenges, such as general confusion or underutilization of the new benefits. To mitigate these challenges, it’s important to develop comprehensive policies and communicate them effectively and regularly to your team. These policies should outline who qualifies for these benefits and how to use them. Make your benefits accessible and appealing to encourage your staff to utilize them.

    Moreover, actively seek feedback and involve your team in refining and improving these benefits and policies. It’s crucial that the benefits you offer align with your team’s needs and interests. Offering benefits that no one uses is not only a waste of resources but also a missed opportunity to enhance employee satisfaction and engagement.

    How GMS Can Help With Your Employee Benefits

    As a business owner, retaining and attracting quality employees is vital for business growth. Offering a competitive benefits package is critical to securing top talent. However, this can be costly and time-consuming. As a professional employer organization (PEO), GMS will work with you to find the benefits package that makes the most sense for your business operations, employees, and bottom line.
    In addition, once we’ve helped you find a benefits package, we’ll help you manage it. Our outsourcing small business benefits services include:

    Let us help you provide competitive and cost-effective benefits while you focus on running your business effectively. Contact us today!

  • As a small business owner, it’s crucial to understand the distinction between Forms 1099 and W-2, as they have significant implications for tax and compliance purposes. Misclassifying employees can lead to costly penalties and legal issues, making it essential to navigate these forms correctly.

    Let’s Start With The Basics: Understanding Form 1099

    A Form 1099 is a crucial tool for reporting income paid to independent contractors, freelancers, or self-employed individuals for tax and compliance purposes. Tax payments should not be reported on the 1099 Form. The most common type is the 1099-MISC, which reports miscellaneous income such as fees, commissions, rent, prizes, and awards. The second type of 1099 is Form 1099-NEC (Non-Employee Compensation), which is specifically used to report non-employee compensation paid to independent contractors and other self-employed individuals.

    Who qualifies as a 1099 worker?

    A 1099 worker is often referred to as an independent contractor. Some types of workers who would receive a Form 1099 may include:

    • A consultant who is hired for a set amount of time to complete a project
    • A freelancer who works on a per-assignment basis and uses their own computer
    • An electrician contracted a few times a year to repair power outages in an office building.

    These workers have more control and flexibility over when, where, and how they perform their work. They are responsible for paying their own self-employment taxes.

    When to use a Form 1099

    You would issue a Form 1099 to individuals or other businesses that provided a service but are not employees of your business. Companies must issue a 1099-MISC to any individual or unincorporated business that is paid $600 or more during the tax year for services rendered.

    Understanding the Form W-2

    Form W-2, on the other hand, reports wages, salaries, and tips paid to employees. It shows the total income earned by an employee and the amount of taxes withheld from their paychecks throughout the year, including federal income tax, Social Security tax, and Medicare tax.

    How does someone qualify as a W-2 employee?

    A W-2 employee is an individual who is paid through their employer’s payroll and has their payroll taxes withheld throughout the year. Every year, by January 31st, they will receive their Form W-2 detailing their taxable compensation, tax withholding, and deductions for employer-sponsored benefits like health insurance or 401(k). They use this information to file their annual taxes.

    These employees typically have scheduled hours, ongoing work, and company-provided equipment and may receive employer benefits. Being a W-2 employee establishes an official working relationship with an employer who has the right to control when, where, and how the employee performs their job duties. Examples include office workers, warehouse supervisors, and administrative assistants with set responsibilities and hours.

    When to use a Form W-2

    Employers must provide Form W-2 to all employees who receive wages, salaries, or tips during the tax year, regardless of the amount earned. Generally, having W-2 employees means that individuals have been given ongoing work, use company equipment, have set hours, and have a direct manager.

    Now that we understand Forms 1099 and W-2, let’s discuss their differences and reporting requirements.

    • Purpose: Form W-2 reports an employee’s taxable compensation and tax withholding. A Form 1099 lists the gross payments made to independent contractors.
    • Employer status: Form 1099 is for independent contractors, while Form W-2 is for employees. The distinction lies in the employer’s level of control over the worker and the worker’s ability to control their own work.
    • Tax withholding: Employers are required to withhold income taxes, Social Security, and Medicare taxes from the wages of W-2 employees. Independent contractors receiving 1099 income are responsible for paying their own taxes, including self-employment tax.
    • Benefits eligibility: W-2 employees are typically eligible for employer-sponsored benefits such as health insurance, retirement plans, and paid time off. Independent contractors receiving 1099 income do not qualify for these benefits.
    • Reporting requirements: Employers must report the income paid to 1099 workers on Form 1099-MISC if the amount exceeds $600 in one year. W-2 wages must be reported regardless of the amount.
    • Deadlines: Form 1099 must be provided to recipients and filed with the IRS by January 31st of the following year. Form W-2 must be provided to employees by January 31st and filed with the Social Security Administration by January 31st (if filing electronically) or February 28th (if filing by paper).

    Misclassification Risks And Penalties

    Having different types of employees within your business can be challenging. Should you accidentally misclassify an employee as an independent contractor (a 1099 employee), your business could experience hefty penalties. The Internal Revenue Service (IRS) and state agencies closely monitor worker classification and penalties for misclassification, including back taxes, interest, and fines. Additionally, misclassified workers may be entitled to retroactive benefits, such as unemployment insurance, workers’ compensation, and overtime pay, which can result in significant financial liabilities for the employer.

    How GMS Can Help With Tax And Compliance

    GMS has a comprehensive payroll tax management solution that can assist businesses in ensuring compliance with tax regulations and the proper classification of employees and independent contractors. The following is how GMS can help:

    • Payroll integration: GMS integrates with our payroll systems (GMS Connect), ensuring accurate tax withholding and reporting for W-2 employees.
    • Contractor management: GMS can help track and manage independent contractors, ensuring proper 1099 reporting and compliance with relevant laws and regulations.
    • Compliance monitoring: GMS can provide alerts and reminders for tax filing deadlines, helping businesses meet reporting requirements for 1099 and W-2 forms.
    • Audit support: In the event of an audit, GMS can provide comprehensive records and documentation to support worker classification and the accuracy of tax reporting.
    • Worker classification guidance: GMS can offer guidance and best practices for properly classifying workers as employees or independent contractors, minimizing the risk of misclassification.
    • Centralized record keeping: GMS provides a centralized platform for storing and managing all worker-related records, including contracts, timesheets, and payment records, ensuring easy access and organization during audits or legal proceedings.

    By leveraging the expertise GMS provides to small businesses, business owners can streamline their workforce management processes, maintain compliance with tax regulations, and ensure proper classification of employees and independent contractors, minimizing the risk of penalties and fines. Ready to streamline your payroll processes? Contact us today to talk to one of our experts about how we can help your business.