Request a call Login

  • Amidst the tragedies of Hurricane Ian in Florida, the Internal Revenue Service (IRS) has extended the tax filing deadline for those affected to February 15th, 2023. The original tax filing was due on October 17th, 2022, for individuals with a valid extension to file their 2021 taxes. In addition, the Federal Emergency Management Agency (FEMA) announced that these affected individuals in certain areas would receive tax relief. Any individual and household affected by Hurricane Ian who resides or has a business in Florida can qualify for this tax relief.

    The Effects On Individuals And Businesses In Florida

    The tax relief affects individuals and businesses in Florida in the following ways:

    • Individuals: If you’re an individual who had a valid extension to not file your 2021 taxes until October 17th, 2022, you now have until February 15th, 2023. In addition, the February 15th deadline applies to quarterly estimated income tax payments normally due on January 17th, 2023, and quarterly payroll and excise tax returns normally due on October 31st, 2022, and January 31st, 2023. 
    • Businesses: Any business in Florida with an original or extended due date after September 23rd, 2022, now has until February 15th, 2023, to file and pay. Additionally, tax-exempt organizations are eligible for the extended deadline. This includes 2021 calendar-year returns with extensions due to run out on November 15th, 2022. 

    It’s important to note that any payment initially due before September 23rd, 2022, is not eligible for this relief. Payroll and excise tax deposits due after September 23rd, 2022, but before October 10th, 2022, will be exempt from penalties if they are paid by then.

    What Florida Residents Should Know

    As a resident of Florida, you do not need to apply for filing, payment, or penalty relief as the IRS automatically extends it to individuals with an IRS address of record located within the disaster area. For individuals who live outside the disaster area but have records necessary to meet an IRS deadline located inside the area, the agency will work with you to ensure you are not penalized.

    Outsource Payroll Tax Management Services Today

    As a small business owner, filing taxes can be confusing and challenging. In addition, failing to comply can result in hefty penalty fees. Focusing your time on cutting checks, filling out forms, maintaining records, keeping up with regulations, and staying on top of tax deadlines doesn’t grow your business. On top of this, dealing with the effects of Hurricane Ian adds an additional layer of stress. Let GMS help you during these unprecedented times. Contact us today.

  • The Michigan Court of Claims ruled earlier this year that the legislature violated the Michigan Constitution in 2018 by enacting, and within the same session amending, two ballot initiatives:

    • One requiring higher minimum wages
    • One requiring paid sick leave

    The 2018 ballot initiative was originally designed to raise the state’s minimum wage between 60 and 75 cents yearly until it reached $12.00 in 2022. The initiative was then intended to tack the minimum wage to inflation. Since employers and the relevant state agencies may not be able to implement the changes required by its decision immediately, the court has extended its stay until February 20th, 2023.

    What Employers Should Know 

    Starting February 2023, the standard minimum wage in Michigan will increase from its current $9.87 per hour to at least $12.00 per hour. Because the original 2018 ballot initiative would have increased the standard minimum wage to $12.00 effective on January 1st, 2022, the amount could increase in February 2023. In addition, the minimum wage for tipped employees will increase from its current $3.75 per hour to at least $9.60 or even higher.

    Paid Sick Leave

    Under the Earned Sick Time Act, Michigan employers must provide their employees 72 hours of sick leave annually. For employers with at least 10 employees, all 72 hours of leave must be paid. Small employers are to provide at least 40 hours of paid sick leave annually, while the balance of the 72 hours of leave may be unpaid.

    Partnering With GMS For Payroll Administration 

    Payroll is costly in both money and time. You probably know how your payroll responsibilities impact your operational efficiencies and bottom line. Between tax calculations, payroll, compliance, and all other payroll functions, there’s an insufficient amount of time to manage it properly. Stay up to date with regulatory changes and ensure your employees are being paid correctly by partnering with GMS. Contact us today.

  • Under the Pennsylvania Minimum Wage Act (PMWA), the new state wage-and-hour regulations will take effect on August 5th for tipped and salaried nonexempt workers. The PNWA establishes a fixed minimum wage and overtime rate for employees in Pennsylvania. In addition, it sets forth compliance-related duties for the Department of Labor & Industry and employers. These changes align with additional federal regulations, including raising the tipped employees’ minimum wage to $7.25 an hour.

    New Regulation Requirements 

    Pennsylvania employers are now required to calculate the regular pay rate for salaried, nonexempt employees by adding all remuneration for the workweek and dividing this by 40 hours. In addition, to calculate the overtime pay due, the regular rate is:

    • Multiplied by 1.5
    • Then, multiplied by the number of hours worked more than 40 in that workweek

    The new formula for calculating overtime premiums for salaries of nonexempt employees is:

    • [(Weekly salary + any other remuneration not excluded under 34 Pa. Code § 231.43(a)) ÷ 40 hours] × 1.5 × OT hours = Total Overtime Owed

    This new formula for salaried nonexempt overtime workers is a departure from the Fair Labor Standards Act’s (FLSA) fluctuating workweek (FWW) method of calculating overtime premium pay for salaried nonexempt employees.

    What This Means

    Pennsylvania’s new formula for calculating overtime pay for salaried nonexempt employees was created to be more protective for workers. In addition, it will result in greater overtime pay for employees than before with the federal FWW formula. All employers in Pennsylvania should consider re-evaluating whether their practices comply with the new PNWA formula.

    Is It Time For Your Business To Invest In Payroll Outsourcing Services?

    It’s no secret that payroll management is a long and tiring process, not to mention keeping up with new regulations you must comply with. If you’re struggling, it’s time to consider outsourcing payroll administration to a professional employer organization (PEO) such as GMS. Contact us today.

  • As a business owner, you’re going to have to deal with a seemingly endless number of payroll obligations. Managing payroll for a small business isn’t easy, especially when it comes to dealing with payroll taxes. 

    Between calculating payroll taxes and filling out numerous payroll tax forms, approximately 40% of small businesses spend more than 80 hours per year managing the payroll tax process. That’s a lot of time, especially when it’s not always clear whether an employer should use Form 941 vs 944 to report their payroll taxes.  

     

    Keep reading to learn the difference between these payroll tax forms and which is right for your small business.

     

    What Is Form 944?

    Form 944 is the annual federal tax return that certain small businesses use to report employment taxes. Employers use Form 944 to report:

    • Wages you have paid
    • Tips your employees reported to you
    • Federal income tax withheld
    • Both the employer and the employee share of social security and Medicare taxes
    • Additional Medicare tax withheld from employees
    • Current year’s adjustments to social security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance
    • Qualified small business payroll tax credit for increasing research activities

    Note: While the Federal Unemployment Tax Act (FUTA) is also considered a payroll tax, employers should use Form 940 to report their federal unemployment tax contributions.

    However, the following employers can’t file Form 944:

    • Household employers
    • Agricultural employers
    • Employers who are notified by the Internal Revenue Service (IRS) to file quarterly Forms 941
    • Employers who aren’t notified to File form 944

    This form is generally used by small business employers with an estimated annual payroll tax liability of $1,000 or less.

    New employers can request to file 944 tax forms when they apply for an employer identification number (EIN). If a business has previously filed 941 forms, they can submit a request to the IRS to file Form 944 instead. For more info, check out IRS.gov for IRS Form 944 instructions.

     

    What Is Form 941?

    Form 941 is a quarterly federal tax return used by most employers to report the same employment taxes. Most businesses file Form 941 unless the IRS has notified them that they qualify for the annual filing option via Form 944.

    The official IRS Form 941 instructions provide guidance, but many employers rely on payroll providers like GMS to simplify the process. 

     

    Key Differences Between Form 941 And Form 944

    Below is a summary outlining the key distinctions:

    Who should file

    • Form 941: Employers with an estimated annual tax liability of more than $1,000
    • Form 944: Small business employers with an annual tax liability of $1,000 or less

    When to file

    • Form 941: Due quarterly on:
      • April 30
      • July 31
      • October 31
      • January 31
    • Form 944: Due annually by January 31.

     

    Tax Deposit Requirements:

    • Form 941:
      • If total taxes are less than $2,500 per quarter, deposit taxes when you file the form.
      • If the tax liability is $50,000 or less, deposits are made monthly (due by the 15th of the following month).
      • If more than $50,000, deposits are made semiweekly based on your payday schedule.
    • Form 944:
      • If annual tax liability is less than $2,500, payment is made when filing Form 944.
      • If annual liability exceeds $2,500 but each quarter remains under that threshold, payment is due by the last day of the month following the end of the quarter.
      • If a quarter’s liability is $2,500 or more, deposits follow the monthly or semiweekly guidelines.

    Regardless of the deposit schedule, the IRS recommends using the Electronic Federal Tax Payment System (EFTPS). Understanding the difference between Form 944 vs 941 helps small businesses stay compliant and avoid IRS penalties. 

     

    Should You Switch Your Filing Requirement?

    New guidance from the IRS provides flexibility for businesses whose estimated tax liability does not match their current filing requirement. Consider the following:

    • If you currently file Form 944 but estimate your annual tax liability will be more than $1,000, you may be eligible to switch to filing Form 941.
    • If you currently file Form 941 but expect your annual tax liability to be $1,000 or less, you may be eligible to switch to Form 944.

    To request a change:

    • Send a written request postmarked by March 15.
    • Call the IRS at 800-829-0115 by April 1.

    For more detailed instructions or to initiate a change, visit IRS.gov.

     

    What Information Do You Need To File Forms 941 And 944?

    Although the total tax thresholds are different, both 944 and 941 tax forms require businesses to provide the same types of information. Any business filing these tax forms must report the following information to the IRS.

    • Employer information (e.g., EIN, name, and address)
    • Total number of employees that were paid
    • Employee compensation (wages, tips, and anything else paid to employees)
    • The amount of federal income tax, Social Security tax, and Medicare tax paid by the business and withheld from employees
    • Total amount of tax liability
    • Paid sick or family leave wages, if applicable
    • Consolidated Omnibus Budget Reconciliation Act (COBRA) information, if applicable
    • Any necessary adjustments

     

    How To File Forms 941 And 944

    The IRS gives businesses two ways to file Forms 941 and 944:

    • By mail
    • E-filing

    There are different mailing addresses for businesses, depending on their location, special exemptions, and whether the business chooses to file and pay its payroll taxes simultaneously. Fortunately, the IRS lists out every possible scenario on their website:

    Businesses that want to e-file payroll tax forms can also choose to do so online. This process is not only quicker, but also more secure. Employers can choose to e-file Forms 941 or 944 on their own or have a tax professional submit these forms on their behalf. The IRS provides guidelines for how to e-file Forms 941 and 944 on their website.

    Forms 941 and 944 ready to be filled out.

     

    Correcting Mistakes On Your Payroll Tax Forms

    At some point, you might discover an error on a filed Form 941 or Form 944. The IRS allows you to correct errors by filing:

    • Form 941-X: To correct mistakes on a previously filed Form 941
    • Form 944-X: To correct mistakes on a previously filed Form 944

    The deadlines for corrections depend on whether you underreported or overreported your taxes. Consult the IRS guidelines for detailed deadlines and procedures.

     

    Streamline Your Payroll Process

    Managing payroll taxes and choosing the right form can be complex and time-consuming. At Group Management Services (GMS), we help you navigate these complexities by: 

    • Ensuring you use the correct form based on your tax liability
    • Keeping you up-to-date on IRS deadlines and filing requirements
    • Assisting with electronic filing and tax deposit scheduling

    By streamlining your payroll processes, you can save valuable time and reduce the risk of IRS penalties, leaving you free to focus on growing your business.

     

    How GMS Can Help

    At GMS, we understand that payroll and tax compliance can be overwhelming. Our comprehensive solutions include:

    • Payroll & tax compliance: We handle all of your payroll processing and tax filing needs accurately and on time.
    • Expert human resources (HR) support: Our team stays current on federal requirements so that your business is always compliant.
    • Customized service: We work with businesses of all sizes nationwide, ensuring you have the support you need to simplify your operations.

    Contact GMS here to learn how we can help you with your payroll and ensure you’re always using the correct tax forms for your small business.

  • A decision made by New York State explained that manual workers could sue their company over their wages being paid late. In New York, how frequently one is required to pay a worker depends on how that work is classified. It’s vital to understand who’s considered a manual worker as they must be paid on a weekly basis, not biweekly.

    Who Is Considered A Manual Worker

    In New York, a manual worker is considered a mechanic, workingman, or laborer who spends more than 25 percent of working time performing physical labor. If employees spend at least 25% of their working time engaged in “physical labor,” they will be considered a manual worker. The term “physical labor” isn’t just limited to lifting heavy objects or the back-breaking work many will consider it to reference. Instead, the term includes any worker who completes “countless physical tasks.”

    Frequency Of Paying Manual Workers

    Manual workers in New York must be paid weekly and no later than seven calendar days after the end of the week for which the wages were earned. Large employers can also pay their manual workers semi-monthly, but they must apply to the Commission of Labor.

    However, if you’re working in an executive, administrative, or professional capacity and earning more than $900 a week, the pay frequency doesn’t apply. In addition, there are some cases an employee may be considered exempt from overtime purposes as a manual laborer under the pay frequency law.

    Exemption Eligibility 

    There are large employers that could potentially apply to the New York State Department of Labor for an exemption. To qualify for the exemption, an employer must have an average of 1,000+ employees in New York during the last three years. In addition, if you’re an employer with an average of 1,000+ employees in New York within the last year and an average of 3,000+ employees outside of New York in the previous three years.

    Is It Time For Your Business To Outsource Payroll?

    If you’re a small business owner who finds it challenging to keep up with laws and regulations, consider outsourcing your payroll functions to GMS. At GMS, we provide our clients with GMS Connect, an online payroll software where your employees can keep track of their paychecks. We ensure that all employees are paid the right amount on time. Contact us today.

  • Beginning July 1, 2022, the business standard mileage rate for transportation expenses paid or incurred will be 62.5 cents per mile. The IRS recognizes the gasoline price increases which has caused this midyear change. A new rate for deductible medical or moving expenses will be in effect starting July 1, 2022. The price will be changed to 22 cents per mile as opposed to 18 cents in the first half of 2022.

    The business standard mileage rate is used to calculate the deductible costs of operating a vehicle for business purposes. In addition, the federal government and many businesses use this rate as a benchmark for reimbursing their employees’ mileage.

    IRS Commissioner Chuck Rettig stated, “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses, and others who use this rate.”

    Simplify Your Payroll Administration

    Business owners can utilize the IRS mileage rate through the support of GMS. Our team of payroll experts will be able to answer any questions you may have regarding the changing rates. Consider offering mileage reimbursement at the IRS rate so that your employees feel valued during these unprecedented times. Contact us today. 

  • The U.S. Equal Employment Opportunity Commission (EEOC) announced that the new deadline for employers to submit and certify their 2021 Employer Information (EEO-1) Component 1 has been extended. Employers who missed the original deadline of May 17th, 2022, now have until June 21st, 2022, to submit their 2021 EEO-1 reports.

    The EEOC is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex, national origin, age, disability, or genetic information. Most types of work situations like firing, hiring, promoting, harassment, training, etc., are included under this law. The EEOC investigates any case related to discrimination against an employer who is covered under the law.

    EEO-1 Component 1 Data Collection

    The EEO-Component 1 report is a mandatory collection of data that all private sector companies with over 100 employees and federal contractors with over 50 employees are required to submit annually. These businesses must submit demographic workforce data such as race/ethnicity, sex, and job categories of each individual.

    Outsource Your Administration Function To GMS

    As a small business owner, it can be challenging to meet certain deadlines. Failure to comply can result in substantial penalty fees. At GMS, our experts keep you up to date on deadlines and ensure you are staying compliant with federal and state laws. Contact us today.

  • When considering partnering with a professional employer organization (PEO), many questions may cross your mind. If you’re just now learning about a PEO, you’ve taken the first step toward providing your company with more efficient and unique practices for handling your most precious assets: your employees. You may be asking, what exactly is a PEO? A PEO enables companies to cost-effectively outsource the management of human resources, employee benefits, payroll, and workers’ compensation. As a PEO, GMS leverages its collective buying power to act as one large company. A PEO works diligently with small business owners to provide them with the same buying power as a larger business through a co-employment relationship. By working with a PEO, you gain access to more cost-effective options regarding healthcare, dental, vision, and workers’ compensation.

    There are many reasons why employers use a PEO. As a business owner, you’re already aware of the amount of time and energy that goes into each aspect of managing your business. What can a PEO do for your business that will save you time and money? Continue reading to see how GMS can make your business simpler, safer, and stronger.

    Payroll

    Managing payroll and tax filings can be one of the most time-consuming and costly tasks there is within your business. Small and mid-sized companies spend an average of $2,000 per employee per year to handle payroll. When you outsource payroll with us, you gain access to:

    • Taxes & tax filing
    • Electronic onboarding
    • Pay card options
    • Garnishment administration 
    • Customized payroll reports
    • Employee documentation
    • Time clock integration
    • GMS Connect: advanced online payroll system
    • New hire reporting
    • Employee self-service portal and app
    • Compliance advice and assistance 

    Human Resources

    There are many functions when it comes to human resources management – from recruiting and retaining employees to payroll to tracking vacation time. Focusing on your company should be your number one concern. Your employees are the backbone of your business. HR management plays a role in instituting and suggesting strategies for individuals that impact the growth of your business. Creating an environment that encourages employees to do their best increases longevity in the workplace. Below are the advantages of outsourcing your human resource functions to a PEO:

    • HR audit
    • Human resources information system (HRIS)
    • Recruitment services 
    • Onboarding
    • Compliance assistance
    • Training & development programs 
    • Retention strategies
    • Recognition programs 
    • Employee relations guidance 

    Risk Management

    There are many risks associated with workers’ compensation and workplace hazards. The majority of work-related deaths, injuries, illnesses, and consequential workers’ compensation costs are preventable. With the right risk management solution, you’ll be able to create a safer work environment for your employees, which ultimately results in fewer claims and a lower workers’ compensation insurance rate. Below are benefits you gain when outsourcing risk management:

    • Claim(s) management
    • PEO discount programs
    • Drug testing
    • Workers’ compensation management 
    • Claim investigation
    • Hearing representation
    • OSHA walk-throughs
    • Safety programs & audits
    • Trainings, webinars, and more

    Benefits

    Attracting and keeping quality employees is the number one concern in today’s workplace. As many individuals are looking for new jobs, standing out from your competitors is key. One of the best ways to do this is by offering a benefits package. Offering a benefits package to your employees, show them you are invested in not only them but their future with your business. Below are examples of benefits you can offer your employees:

    • PEO benefit program
    • TPA services
    • Claims administration
    • Wellness programs 
    • Supplemental insurance programs
    • ACA compliance
    • ERISA compliance
    • RX specialist & assistance 
    • 401(k) 
    • Benefit plan offerings/administration
    • Benefit compliance reporting
    • Claim audits/case management 

    As the list of services that GMS can offer your business is extensive, our experts are here to help with any area of your business that is struggling. By choosing to partner with us, we can better understand what services will be of benefit to your business. We work with you to create a plan that’s designed specifically for the size and needs of your business. Contact us today to learn more!

  • Any employer who conducts business in Georgia has new compliance-related requirements to be considered in 2022. In order to determine the amount and type of tax credits that are available to employers, Georgia ranks all counties, census tracts, and special zones. Depending on what ranking your business falls in, it can significantly impact jobs and investment credits.

    A list of these rankings is published by Georgia’s Department of Community Affairs (DCA) at the beginning of each calendar year. The published list highlights any area that is changing and could lead to lost benefits that are available from the previous year. However, any business that is within an affected location can submit a Notice of Intent (NOI) with DCA no later than March 31st. For example, if a business filed an NOI by March 31st, 2022, that business would preserve the 2021 ranking/status for 2022, 2023, and 2024. If you do not submit an NOI in a timely manner, any business with a changing ranking or status will only be allowed to claim credits at the 2022 ranking level.

    If you plan to expand or invest in a business in the state of Georgia within the next three years, be sure to review the annual list and file an NOI if their location is within an area with benefits that are decreasing.

    Tax Credits Available To Offset State Payroll Withholding Taxes

    Depending on the location, Georgia continues to expand the availability of tax credits that can offset income tax liabilities and withholding taxes. Tier one counties, less developed census tracts, opportunity zones, and military zones are eligible for job credits. Tax years beginning January 1st, 2022, will also include investment credits for investments made in rural counties.

    The Department of Revenue established a new procedure that must be carried out through the Georgia Tax Center to claim any credits against withholding tax. This procedure was put in place to speed up the application and approvals processes. Follow these important steps that are required to use these credits to offset withholding:

    • Credit approval
    • Claiming of credit on income tax return
    • Notification of intent to utilize credit against withholding tax
    • Offsetting payments of withholding tax

    Outsource Your Payroll Administration To GMS

    Payroll tax filing requirements are complex and ever-changing. As a business owner, it can be challenging to meet payroll tax deadlines and file taxes correctly, and failure to comply can result in high penalty fees. In addition, staying on top of regulations, deadlines, and filling out forms takes time away from your busy schedule. Stop spending time worrying about these HR functions and start spending time growing your business. Contact us today!

  • Running a business is complicated enough. Having to deal with wage and hour violations only makes your ability to grow your business even more difficult.

    The majority of businesses in the U.S. are subject to the rules and regulations set by the Fair Labor Standards Act (FLSA). These rules establish standards for minimum wage, overtime pay, recordkeeping, and youth employment compliance.

    While these rules are designed to protect employees, it’s not always easy for employers to keep track of and apply these rules. It’s very easy for a simple, honest mistake to lead to an FLSA violation, which is why businesses should take the time and effort to conduct internal audits to identify any potential issues.

    Why Should Businesses Conduct Internal Wage And Hour Audits?

    The biggest reason to complete internal wage and hour reviews is quite simple – FLSA noncompliance is expensive. Violations can range from $1,000 to $10,000 each. In addition, FLSA violations could end up costing businesses in a couple of other ways. 

    According to the U.S. Department of Labor (DOL), the Wage and Hour Division took more than 24,700 compliance actions against businesses in 2021. Those actions led to more than 190,000 workers earning more than $230 million in back wages. This results in non-compliant companies owing an average of $1,211.70 in back wages for affected employees.

    In addition to back wages, financial penalties make FLSA violations even more costly for a business. The DOL will fine any company that willfully or repeatedly violates minimum wage or overtime pay requirements. These penalties include civil fines up to $1,000 for each violation.

    Repeated violations can also make a business a common target for future audits. The DOL chooses targets for wage and hour audits as part of an overall initiative or because individuals have filed complaints against a specific business. By failing an audit, the DOL has reason to check in on your business in the future for additional violations.

    An FLSA Audit Checklist

    A thorough FLSA audit includes multiple steps. Each of these steps is designed to provide a comprehensive overview of who is covered by the FLSA as well as, the different factors that can lead to violations.

    1. Review employee classifications
    2. Review regular and overtime pay calculations
    3. Review records and policies

    Employee classifications

    The first step of auditing your wage and hour practices is to examine the exemption status for all your employees. It’s essential to properly classify each employee to determine their exact employment status and whether or not they’re eligible for overtime.

    Employers conducting an audit should create a list that includes every employee. The safest way to start is to assume that every employee is eligible for overtime until proven otherwise. This employee list should include the following information to help employers determine overtime exemption status:

    • Job titles
    • Job descriptions
    • Salary information

    Once armed with this information, employers can perform a trio of tests to determine whether employees qualify as exempt or not. If an employee passes all three tests, employers can assume that they are exempt from overtime pay.

    • The salary basis test – Exempt employees must be paid a predetermined, fixed salary that cannot be reduced.
    • The salary level test – Exempt employees must meet the minimum salary threshold of $35,568, which equates to $684 per week.
    • The duties test – Employees must primarily perform a list of set duties established by the DOL.

    The easiest way to determine exemption status is whether an employee is a blue-collar worker or not. Blue collar workers are eligible for overtime, regardless of their salary. Non-salary employees are also eligible for overtime.

    When it comes to “white-collar exemptions,” employers will need to review each employee’s title, job description, and current duties. The DOL lists five separate groups as exempt from overtime pay, which are explained in-depth in our post on navigating white-collar exemptions. If a white collar employee’s duties align with any of the following groups and pass the salary tests, they are exempt.

    • Executive
    • Administrative
    • Professional
    • Computer
    • Outside sales

    Pay calculations

    Once you’ve successfully separated exempt and non-exempt employees, it’s time to review your pay practices to ensure that everyone is being compensated properly. This phase involves confirming the use of proper pay practices and calculations.

    • Ensure all hourly workers are being paid at least $7.25 per hour (or more, depending on your city/state).
    • Confirm that all employees who earned overtime were paid at least one and one-half times their regular pay rate after 40 hours of work in a workweek.
    • Double check to see if there are any employees who work in two different positions at differing rates that require special pay calculations and timekeeping practices.

    Records and policies

    An internal audit is a good time to review your company’s timekeeping policies. The FLSA requires employers to maintain a variety of records pertaining to their employees’ wages and hours. As such, your audit should confirm that your business records the following information and that all recorded information is accurate:

    • Employees’ personal information which includes, name, home address, occupation, sex, and birth date if under 19 years of age.
    • Hour and day when workweek begins.
    • Total hours worked each workday and each workweek.
    • Total daily or weekly straight-time earnings.
    • Regular hourly pay rate for any week when overtime is worked.
    • Total overtime pay for the workweek.
    • Deductions from or additions to wages.
    • Total wages paid each pay period.
    • Date of payment and pay period covered.

    How Often Should I Conduct FLSA Audits?

    In general, it’s best to perform wage and hour audits at least once a year. For example, some organizations plan a regular internal audit timed with either the beginning or end of their fiscal or calendar year.

    Another option is to conduct ongoing reviews throughout the year. This process involves more regular check-ins for compliance concerns, such as employee classifications or overtime calculations for new employees. Employers can also combine a comprehensive yearly audit with quarterly inspections to be as proactive as possible about FLSA violations.

    Stacey Larotonda, Vice President of Client Services at GMS, emphasizes, “FLSA self-audits should be done by every business on a consistent basis. It’s an easy way to make sure you aren’t hit with a significant fine should the Department of Labor want to audit you. Spending a little time on the front end can save you lots of money in the long run.”

    Protect Your Business From FLSA Violations

    A simple timekeeping mistake is all it takes to land your company in trouble with the DOL. Internal FLSA audits are one tool that employers can use to protect their business from misclassification, timekeeping errors, and other challenges. However, sometimes business owners can use some additional support.

    Simply put, most business owners don’t have the time to handle every tedious administrative task. GMS partners with businesses to help them simplify their core business functions. GMS provides your business with experts and a comprehensive web-based payroll solution to help you save time and protect your business against FLSA violations, wage and hour laws, and other costly issues. Our experts help business owners with:

    • Contractor vs. employee status
    • Recordkeeping
    • Overtime exemptions
    • Child labor

    Ready to streamline your payroll process and other HR tasks? Contact us now about how GMS can make your business a safer place.