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  • As a business owner, you get to make the rules in  your own company. However, there are still plenty of regulations and laws that can impact your business.

    It can be difficult for owners to keep track of every single rule and avoid non-compliance costs when they’re  busy, well, running a business. That’s why it can pay to invest in human resource outsourcing through a Professional Employer Organization. A PEO can help your business stay in line with complicated regulations to help you keep your HR functions in order. Here are areas  where a PEO can help save you some money.

    Image of compliance needs for a business. Learn how human resorce outsourcing with a PEO can help with compliance.

    Four Areas Where Non-compliance Can Cost Businesses

    Workplace Safety

    OSHA takes safety very seriously and can dole out some significant fines for non-compliance. According to the OSHA Penalties list updated Jan. 13, 2017, serious violations can cost a business a whopping $12,675 per violation. It’s 10 times that amount for willful or repeated penalties.

    Workplace inspections and guidance on compliance can do more than just avoid costly OSHA fines. They can make your workplace safer and minimize risk for workplace accidents. 

    Hiring

    Hiring employees can be a costly experience if you aren’t compliant with appropriate policies and practices. There are several laws enforced by the Equal Employment Opportunity Commission that can trip up companies that aren’t careful, leading to lawsuits from disgruntled applicants over improper job applications, discrimination, or other issues.

    Healthcare

    Even with the current political administration in power, businesses should still plan for Affordable Care Act  compliance. As our own Andrew Szczesniak wrote earlier this year about the future of the ACA , “it’s impossible to predict with any certainty what will happen in the next 12 months, let alone the next two years.”

    With many people committed to the ACA through at least 2017, businesses still need to make sure that they stay compliant. Failure to offer coverage under current legislation could end up costing a company thousands of dollars  each month, depending on the number of employees at your company and how/if you offered employees coverage. The specifics can get complicated, so The Henry J. Kaiser Family Foundation has an easy chart that you can follow to see where you fall.

    Payroll

    Businesses have to deal with tax liabilities and responsibilities. If you don’t stay compliant, you could end up having to cut a few more checks as a penalty. 

    Bloomberg reported back in 2014 that “the IRS issued 6.8 million penalties totaling $4.5 billion” for business in the U.S. over the course of a year. That’s a lot of lost cash that could be avoided by making sure your business is compliant with tax liabilities and responsibilities.

    Stay Compliant through Changing Regulations

    It can be tricky enough for some businesses to stay compliant with every rule and regulation. It gets even harder when laws are created or updated. 

    The ACA is a great example of how changing legislation can create questions about what you need to do to keep your business compliant and avoid costly penalties. A PEO has a dedicated team of HR specialists who can help you stay up to date on the legislation and regulations that may affect your business. 

    With a PEO, you don’t have to toil away for long nights trying to make sense of every little detail. PEO experts know how to do that so your business is safer and stronger in the long run. Contact us today to talk to one of our experts about how a PEO can help your business with compliance.

  • Non-compliance can cost businesses a lot of money. If you’ve read our posts before, you’ll know that the benefits of staying compliant are things that we’ve harped on before, but it’s worth repeating, especially when small business owners pay billions of dollars each year in payroll tax penalties. It’s especially true when it comes to something as problematic as multi-state payroll compliance.

    The problem with multi-state payroll compliance is that the rules you followed for your home state may not be the same as the other states where you do business. Each state has different payroll standards, meaning that you may not be nearly as compliant as you thought you were.

    Potential Multi-State Payroll Compliance Issues to Consider

    It can already be tricky to keep track of compliance needs, but adding multiple state locations just amplifies the issue. A few such areas of concern include:

    • Minimum wage
    • Income tax withholding
    • Leaves of absence regulations
    • Common ownership concerns
    • Workers Comp regulations

    We’ll use minimum wage as an example of just how quickly multi-state considerations can get out of hand. Let’s say that you’re a business based in Ohio that hires a lot of employees at minimum wage. If you have an operation in California, you’re going to be expected to pay California’s minimum wage of $10.50 an hour instead of Ohio’s $8.15 as of 2017, even if you’re mainly an Ohio-based business.

    While that may seem simple enough, there’s more. Twenty states increased their minimum wage rates at the beginning of this year. Also, you may not know that there are some cities and counties that observe different minimum wages than their state’s standard. For example, Cupertino, Calif. follows a $12 minimum wage as of Jan. 1, 2017, and they’re not alone. As of March 9, 2017, the U.C. Berkeley Labor Center lists 41 counties and cities across the country that observe a different minimum wage than the rest of their respective states.

    There are also other considerations than just the minimum wage, such as overtime pay rates. According to the Department of Labor, Minnesota’s basic minimum rate changes depending on whether your enterprise has annual receipts of more than or less than $500,000. While premium pay after designated hours kicks in after a 40-hour work week, it doesn’t kick in until after 46 hours in Kansas. Each state has their own specific differences that can create a huge problem for businesses who just based their payroll compliance on their home state.

    Avoid Payroll Compliance Issues Across Multiple States

    As you can tell, keeping track of payroll compliance across multiple states can be extremely complicated. It’s critical that you notify your payroll team about work situations in different states as soon as you can. That way whoever handles your payroll tax management can get a head start so that you can avoid costly non-compliance issues.

    If you’re a small business owner, there’s a chance that payroll compliance responsibilities fall on your shoulders, or on someone else who isn’t necessarily trained to handle payroll. If the thought of managing multi-state payroll compliance seems too intimidating, we’re happy to help.

    As a Professional Employer Organization, we have the experts you need for payroll tax management. Contact us today to talk with one of our experts about how multi-state compliance issues may affect your business and how we can help you stay compliant.

  • When you’re a small business owner, your schedule is never empty. Each year contains several important deadlines that you need to follow to keep your business compliant with important laws and regulations involving your company’s finances and employees. Just a single missed date can lead to problems with the IRS or other government agencies.

    Keeping track of all these dates as well as everything else you need to do as a business owner can be difficult. We’ve put together a list of critical dates you need to know to keep your business legally compliant.

    Image of a calendar of 2018 dates for small business owners.

    2018 Tax Due Dates by Entity

    As a business owner, you need to worry about filing more than just your personal taxes. The deadlines for filing 2017 business taxes can differ depending on what type of business you run and if you file by the original deadline or need an extension. A simple misunderstanding about deadlines can leave you with costly penalties, so it’s important to know exactly when your business taxes are due. Here’s a rundown of the filing dates in 2018.

    • Original deadline for S Corporations and partnerships – Thursday, March 15
    • Original deadline for personal taxes and C Corporations – Tuesday, April 17
    • Original deadline for nonprofits, charities, and other exempt organizations – Tuesday, May 15
    • Final deadline for exempt organizations – Wednesday, Aug. 15
    • Final deadline for partnerships and S Corporations – Monday, Sept. 17
    • Final deadline for C Corporations and individuals – Monday, Oct. 15

    Other Important Dates for Small Business Owners

    Tax deadlines aren’t the only important dates that you need to know for your business. Several forms or other documents need to be filled out throughout the year as well. Many of them are also complicated or lengthy, which can make completing them on time difficult if you don’t start early enough or have any assistance. Make sure the following deadlines are on your schedule so that you can finish everything on time.

    File W-2 forms to employees and agencies

    Wednesday, Jan. 31

    You don’t get much of a break after the start of the new year. All W-2 forms need to be completed and provided to employees either by mail or online by the end of Jan. 31. This also applies to any 1099 forms that need to be sent to contractors, vendors, or other professionals who worked for your company during 2017. 

    In addition to W-2’s, W-3, 1099, and 1096 forms need to be filed with the appropriate agencies by this deadline as well. Late filings can lead to $250 fines per form, with even greater fines for inaccurate forms according to the Small Business Chronicle.

    Provide employees with 1095-C form

    Wednesday, Jan. 31

    In addition to W-2 forms, you also need to send 1095-C forms to your employees by this date if you offer health insurance coverage. This document contains details on which coverage was available to your employees and which months the specific employees were eligible for that insurance. 

    File forms 1094-C and 1095-C to IRS

    Tuesday, Feb. 28 (by paper)

    Monday, April 2 (electronically)

    While your employees need to have their personal 1095-C forms by the end of January, you have a little more time before you submit the same information to the IRS. In addition to the 1095-C forms, you’ll also need to provide 1094-C forms, which are sent only to the IRS and serve as a cover sheet for the 1095-C form.

    File employee benefit plans (form 5500 series) to DOL

    Wednesday, July 13

    These forms are used to file your employees’ annual benefit plan information with the Department of Labor (DOL). The DOL uses these forms to make sure that these plans are being operated according to certain standards, making them a key compliance tool that needs to be filed every year.

    Prepare Your Business for 2018

    Knowing all the deadline dates ahead of time is very helpful, but it still doesn’t make your schedule any less busy, especially when it comes to managing compliance concerns and internal functions. Fortunately, a Professional Employer Organization can help you not only save time, but also improve compliance and save costs through human resource outsourcing.

    A PEO can offer you access to a team of experts that can help your business manage any or all your internal HR functions, freeing your time up and strengthening your business in the process. Contact GMS today to talk to one of our experts about what your business needs and how we can help. 

  • Every year brings new opportunities. Unfortunately, time can usher in big changes that can leave businesses scrambling. Over time, new legislation can leave your company open to legal problems if you don’t take appropriate action. Fortunately, there is one key tool you can use to protect your business – a good employee handbook. 

    There’s more to a handbook than just basic information for new hires. This document acts as an important compliance document for your business that shares you and your employees’ rights and obligations. Unfortunately, it can be easy to let your handbook become outdated – and an outdated handbook is a serious problem for any business. As time goes on, it’s important to make sure that your handbook evolves as new laws go into effect. Here are five parts of your handbook that you should update (or create if you don’t have one already)..

    Image of a small business owner making handbook updates in 2018.

    Sexual Harassment

    Every handbook should cover sexual harassment, but you should look at ways that you can further enhance your anti-harassment policy to double down on how sexual harassment is unacceptable in the workplace. The Society for Human Resource Management (SHRM) offered up recommendations for updating your handbook’s anti-harassment policy. They suggest that your handbook includes definitions and examples of the two types of sexual harassment: 

    • Quid pro quo, in which someone demands sexual favors in exchange for certain benefits or to avoid negative outcomes
    • Hostile work environment, in which harassment is so severe and prevalent that it creates an environment that negatively impacts an employee

    Not only should you include information on what is and isn’t acceptable, but you’ll also want to have a policy in place to let employees know multiple methods for reporting incidents. There may also be specific compliance requirements depending on your state, so make sure to evaluate your local sexual harassment training requirements to ensure that your policies are up to date with the latest regulations.

    Social Media

    According to SHRM, federal organizations like the Department of Labor (DOL) and the National Labor Relations Board (NLRB) started making changes to limit workers’ rights when it comes to social media policies. According to SHRM, one big factor for this trend was that the NLRB “overruled a prior decision that placed limits on employer handbook policies that could be “reasonably construed” by workers to limit their right to engage in protected concerted activity.” 

    While this trend is favorable for employers, it’s still very important to have a section on social media to make it clear where you stand for your employees (and for any instances where you need to act on your policy. This includes details on the following:

    • Confidentiality and privacy of company information
    • Your employees’ identities online
    • Limitations on online publications
    • Creating and managing content

    Parental Leave

    If your business doesn’t have a policy on parental leave, you may want to change that. Businesses with at least 50 employees are already affected by FMLA, which allows eligible employees to take parental leave. Even if you don’t hit the 50-employee threshold, more states have parental leave laws, such as New York, California, and New Jersey.

    The other important factor to consider is that even if your business isn’t in a state that requires paid parental leave, it can be a very attractive benefit for both your current and potential employees. According to the Harvard Business Review, 42 percent of employees would consider choosing a job that offered paid parental leave over one with a higher salary or hourly rate. Of course, these policies need to be clearly laid out in your handbook. Make sure your policy is specific about your plan’s details, including:

    • Who is eligible for parental leave
    • How long the leave can or will last
    • How compensation works
    • When requests for leave must be made
    • Timelines for when leave can be taken
    • How termination affects parental leave

    Medical Marijuana

    For years, medical marijuana has been subject to ongoing legal discussions and reviews, which may mean that additional handbook updates are a part of your future. Legal shifts can put business leaders in a bind if they don’t have clear drug policies in their handbook about how to handle testing and medicinal use. This is also complicated by the fact that marijuana laws can differ greatly between states. It’s important to pay attention to any changes to your local marijuana laws so that you can adapt your company policy if necessary. In terms of your handbook, consider adding info on the following:

    • Instituting a drug-free workplace policy
    • Outline a drug testing policy pending local laws
    • Discipline standards

    Update Your Employee Handbook to Prepare Your Business for the Future

    If you think keeping your employee handbook up to date is a lot of work, you’re right. Creating and maintaining a comprehensive document of policies requires collaboration between business leadership and both legal and HR experts. As the owner of a small business, those responsibilities may fall to you if you don’t have help.

    Want to talk to an expert about your handbook and other risk management strategies to help protect your business and save you time. Contact GMS today to learn more.

  • Let’s be honest; what business owner looks forward to managing payroll? While payday may be exciting for your employees, it’s likely that you’re not thrilled about having to put together payroll reports, track deductions, and oversee every other critical aspect of payroll administration, especially if you do everything by paper. 

    For some small business owners, payroll administration is just a necessary part of business life and the business isn’t big enough to justify its own HR department. While payroll administration is necessary, it doesn’t have to be a big burden. Online payroll software can give you the tools to take some of the pain out of payday preparation. Here are a few questions you should consider when evaluating your payroll management process.

    Small business owner using online payroll software. 

    Do You Spend Too Much Time on Payroll Administration?

    Payroll management takes time. A survey conducted by the National Small Business Association found that more than half of owners who handled payroll internally spent at least three to five hours per month on the administration of payroll taxes alone. That time doesn’t even include other key payroll functions like processing paychecks, keeping records, and answering questions from employees. 

    Five hours per month may not sound like a lot, but it adds up to 60 hours of payroll administration per year. That’s more than a full work week of time solely dedicated on payroll, and that’s if you only spend five hours per month. Depending on your situation, you could easily spend more time to try and keep your business compliant with payroll tax requirements. If you cut down the time you had to spend on payroll administration, it would free you up to focus on other key projects that can help you grow your business (or even take a well-deserved break every now and then).

    Are You Afraid of Payroll Taxes?

    It’s important to spend time to make sure your payroll is managed correctly, as noncompliance can be costly. According to the Federal Register, the Department of Labor increased the penalties for payroll tax violations effective Jan. 13, 2017, making penalties even more expensive now than they were in the past. 

    When you aren’t a trained payroll professional, mistakes can happen even if you spend more time on payroll tax management. A miscalculation or missing piece of information is all it takes to incur a penalty. Payroll software allows you to easily keep track of deductions online without having to shuffle through old sheets of paper to determine if you did everything right.

    Is Your Business Growing?

    Even if you have a handle on your business’ payroll now, that may not be the case in the future. The more employees you add, the more work will be necessary to complete payroll. If you handle payroll offline, that means more storage space for documents, more potential for mistakes, and more strain on your schedule. 

    Just because your business grows doesn’t mean that your already-hefty workload needs to get bigger. Online payroll allows you to manage everything from any location as long as you have an internet connection. Thanks to the ability to complete payroll in a fraction of the time, you can add more employees without worrying nearly as much about how much longer it’ll take you to handle payroll administration each month.

    Online Payroll for Small Businesses

    Small business owners wear many hats, but you don’t have to be on your own when it comes to payroll management. Outsourcing payroll administration to a Professional Employer Organization allows you to lessen your workload while gaining the benefits of online payroll services. Not only does this mean you can make the move to online payroll, but you also have access to a dedicated payroll specialist who can provide you with help when you need it.

    Considering investing in online payroll software? Contact GMS today to talk to one of our experts about how payroll software can help you and your business.

  • Dealing with health insurance is one of the biggest challenges for a small business owner. Between the cost of insurance and the need to attract and retain talent, offering insurance is a major decision. Add in all the uncertainty that surrounds your responsibilities and health insurance can be a major headache.

    Simply put, health insurance administration is confusing. It’s understandable why employers are unsure about the health insurance requirements for small businesses – there’s a lot of information and only so much time to manage everything. This post will break down what you need to know about small business health insurance requirements and how you can keep your company compliant.

    Do Small Businesses Have To Provide Health Insurance?

    When it comes to small business health insurance requirements, this is likely the biggest question on your mind. The exact definition of a small business can differ from one organization to another. According to the Affordable Care Act (ACA), any business with 50 or fewer full-time-equivalent employees counts as a small business.

    That cutoff is significant because businesses with 50 or fewer full-time equivalent employees are not required to offer health coverage to their employees. However, these businesses are still required to provide a report about healthcare information to employees. This report should cover certain information about the health insurance marketplace, outlining what it is and how employees can contact the marketplace.

    A doctor going over the health insurance requirements for a small business.

    Requirements For A Small Business That Offers Health Insurance

    Despite health coverage not being mandatory, many small businesses with fewer than 50 full-time employees still choose to provide workers with health insurance because quality healthcare coverage can help businesses attract and retain top talent. This decision can be very beneficial, but it does mean that small business owners will need to take on a few new responsibilities.

    Minimum employer contribution for small business healthcare

    If an employer opts to offer group health insurance, the business must pay at least half of the monthly health insurance premiums. Employers must also meet the affordability threshold for the health coverage they offer. In 2022, an employee’s monthly contribution couldn’t exceed 9.61% of their income. The IRS adjusts this rate every year and has already announced that the affordability requirement will go down to 9.12% in 2023.

    Employees eligible for coverage

    Small businesses that offer health insurance are required to offer coverage to all full-time equivalent employees. Full-time equivalence requires an average of 30 hours of service per week for a calendar month or at least 130 hours of service in a month. You can also choose to offer health coverage to your part-time employees as well, although it is not mandatory.

    An employer may not discriminate between employees when offering insurance. If you offer insurance to some full-time employees, you must offer it to every employee. You must also provide health insurance to each employee’s dependents up until they turn 26 years old. However, federal law does not require employers to offer coverage to any spouses or other domestic partners.

    90-day maximum waiting period

    When an eligible employee is hired by a business that offers health insurance, that employee must be offered health insurance within 90 days of his or her employment start date. Employers may institute a waiting period before new employees can enroll in the company’s health insurance plan. A small business owner may also decide to waive this waiting period and allow employees to enroll as soon as possible.

    Summary of benefits and coverage (SBC) disclosure

    Employers are required to provide eligible workers with an SBC form to help individuals understand their options. This form explains what an employer’s plan covers and exactly what it costs employees. This includes breakdowns of specific costs, such as deductibles and out-of-pocket costs for varying medical events. The Department of Labor provides an online SBC template and other resources for any owners who provide health coverage.

    Tax Reporting Requirements For Small Business Health Insurance

    Offering comprehensive health coverage isn’t enough to meet your requirements. There are also certain tax reporting requirements that small business owners must follow if they decide to offer group health coverage. The following requirements include:

    What It Takes To Manage Healthcare Benefits

    In addition to following special requirements when offering healthcare, small business owners also need to consider how they’ll manage this new benefit. While employers can go through the Small Business Health Options Program (SHOP) to offer coverage for small groups, this means you’ll have to handle policy administration and health insurance billing.

    Fortunately, you don’t have to take on employee benefits administration alone. As a professional employer organization (PEO), GMS can leverage its buying power to procure quality group health insurance coverage with lower premiums than a small business would be able to obtain on its own. GMS also gives you access to trained benefits experts who can help small businesses stay compliant with any health insurance requirements.

    Looking to invest in health insurance for your small business? Contact GMS today to talk to one of our experts about how we can help you attract and retain quality employees through benefits administration and other services.

  • Thanks to technological advancements in the modern workplace, remote work, or work-from-home (WFH) jobs have become increasingly more common. According to the Global Workplace Analytics’ analysis of 2018 American Community Service data, work-from-home jobs have grown 173 percent since 2005—11 percent faster than the rest of the workforce. Remote work has likely grown even more so as a result of the 2020 outbreak of COVID-19, which prompted many employers to shift to a remote work model to limit the spread of the coronavirus. 

    Telecommuting can be an attractive work option for both employees and employers. For employees,  flexible work hours and more time to spend with family can make remote work an ideal situation. For employers, hiring remote workers can save money and increase productivity if you manage your remote team effectively. 

    As more businesses implement work-from-home policies, employers will need to consider how the trend will impact HR initiatives. Here are some best practices for managing HR for remote employees.

    A small business employee working from home.

    Remote Employee Performance Management

    How do you manage an employee that you don’t see face-to-face every day? With technology and some effort, it may not be as hard as you think it is. In fact, some evidence shows that working remotely can improve performance. 

    According to the Society for Human Resource Management (SHRM), “77 percent [of employees] reported greater productivity while working offsite.” In addition, the article cites a U.S. News & World Report story that states “Telecommuters log five to seven more hours per week than non-telecommuters” With good management, remote employees can be a boon for business.

    Of course, this can all depend on making sure that proper employee performance management practices are in place to monitor performance and make sure that employees stay engaged. In terms of monitoring performance, timesheets or online time tracking can help you keep track of employee productivity.

    It’s also good to set up phone or video check-ins to see how they’re doing (but not so often that it feels like they’re being micromanaged). In addition, regular facetime can help remote employees feel like they’re a part of the company.

    While telecommuters can have flexible schedules, it’s a good idea to make sure that part of their schedules overlap with office workers and that they work together via Skype, Zoom, Slack, or other communication programs. 

     

    Payroll for Remote Employees

    Managing payroll can be a complex and time-consuming task for any business owner. However, remote employees might be subject to different payroll regulations and laws depending on where they’re located. Each state, county, and even city can have its own stipulations on how much people are paid and how it happens. This can affect multiple aspects of payroll compliance, including:

    Employers must also find a way to display federal and state labor law posters for remote employees. You can electronically share the posters via email or in an employee online workplace portal, or you can mail copies for the employee to keep.

    In addition, employers need to be aware of any state requirements for the reimbursement of business expenses that remote employees may incur, such as Internet access from a home office. Where the expense may be used for business and personal use, such as having a stable WiFi connection, consider a system to help employees monitor and record how much of the cost is related to business activities and reimbursing employees at least that amount.

    Nobody wants to be hit with costly non-compliance penalties, especially for infractions that could be easily avoided. If your employee works in a different city, make sure that you or your payroll provider checks each state’s payroll regulations to make sure that your business is compliant.

     

    Hiring Remote Employees

    While some HR functions may be impacted more by remote work locations, the hiring process can be very similar to what it would be for anyone who works on location. Aspects of the process like creating face-to-face time for an interview, assessing skills, and determining if someone is a good culture fit all apply to remote employees as well.

    While it’s not always possible to have remote applicants sit down for an in-person interview, technology gives you a way to conduct a “face-to-face” interview. Video interviews through Skype, Zoom, and other tools allow you to still get a more personal feel for how an applicant would fit through nonverbal communication and body language.

     

    Terminating Remote Employees

    As for termination, you need to take the same precautions that you would for someone located in your office. Create a checklist of matters to address when an employee is terminated, such as final pay requirements, removing IT and security access, and retrieving any company property in their possession (if the employee has anything). If the employee is out of state, make sure to review the laws in that state. For example, final payment laws can differ, impacting what’s included in a final paycheck and deadlines for when it must be provided.

    Another item to consider is how you inform your soon-to-be former employee about the termination. Even if he or she telecommutes, it’s good to let an employee hear the news face-to-face, whether it’s for an in-office meeting or through a video conferencing tool like Skype. The latter may not be as personal, but it’s much better to let someone know about a dismissal during a video conference than via email.

     

    Workplace Safety Concerns for Work-from-Home Employees

    Even though remote employees may not work in your office, they still may be subject to health and safety regulations. The level of responsibility an employer has regarding workplace safety for remote employees is hazy. 

    According to SHRM, OSHA is on record as saying that it “will not conduct at-home workplace inspections and that it will generally not hold employers liable for at-home safety issues.” However, the article also cites attorney Alec Beck stating that “OSHA continues to maintain that employers are responsible for safe working conditions regardless of location.” 

    As a result, the best plan of action is to create safety reporting systems and policies that can help protect you and your employees. SHRM suggests the following risk management strategies to help reduce the chance of claims against your business:

    • Create an at-home work policy and disseminate it to all employees.
    • Require that remote employees create and provide evidence of a dedicated work area at home that has been set up according to your specifications.
    • Periodically follow up to ensure compliance.
    • Require employees to have homeowner’s or renter’s insurance that covers any potential equipment damage or liability.
    • Review the employer’s insurance to make sure that all contingencies are covered—including business travel incidents.
    • Make it clear that computer security issues are monitored and that employees wishing to use their own computers must have safety protocols installed.

     

    Manage HR for Remote Employees with a PEO

    It takes a lot of hard work to run a business. Telecommuting adds yet another layer of complexity to HR management, a task that already requires plenty of time and know-how. This amount of work and expertise is a big reason why many businesses turn to a professional employer organization (PEO) to help manage HR.

    At GMS, our experts can help you save time and strengthen your business through payroll management,  benefits administration, and other key functions. Contact GMS today to talk to one of our experts about how we can help your company manage remote employees.

  • Probably. Maybe. Maybe not. Who knows? Do you know?

    As a Sales Rep for a Professional Employer Organization (PEO), I talk with small to medium-sized business owners on a day-to-day basis. I never cease to be amazed at how well they know their company, their employees, their business, their industry, and their competition. When you spend 80 hours a week working on your business, you become an expert.

    Yet, these same business owners will often tell me, “I don’t know what I don’t know. And even if I knew what I didn’t know, I don’t always know how to find out what I need to fix, remedy, or comply with the situation.” Of course, they don’t. They’re devoting all their time to making a better product and/or a better company.

    If you’re new to the game or haven’t spent a lot of time thinking about this, you might be wondering what regulations I’m speaking of in the title of this post. After all, those are geared towards large companies, not small, independent businesses, right?

    Compliance chalkboard for small businesses. 

    Federal Regulations for Business of All Sizes

    Some things are required no matter the size of your company. For example, you must make sure you have I-9 forms on all your employees and that they’re filed correctly.  There are hefty fines tied to misfiled or missing forms. You also need to have the required employment posters hanging in prominent places for your employees so they can see what their workplace rights are.

    Other laws are based on how many employees you have. For example, if you have between one and 10 W-2 employees, these laws apply to you:

    • Fair Labor Standards Act (FLSA)
    • Employee Polygraph Protection
    • Equal Pay Act
    • Consumer Credits Protection Act
    • National Labor Relations Act

    Once you have between 11 and 14 employees, you have to become compliant with OSHA and all federal health and safety standards. That includes all the reporting that comes with it.

    From 15 to 19 employees, you need to start paying attention to the following regulations:

    • Title VII, Civil Rights Act
    • Title I, Americans with Disabilities Act
    • Pregnancy Discrimination Act

    At 20 employees, you have to worry about COBRA (if you’re offering benefits) and Pregnancy Discrimination Act. And it goes on and on and on… you get the idea.

    How to Stay in Compliance with Federal Regulations

    How does a business owner know what they need to be compliant with while working full-time on their business? There are several ways I can think of:

    • During all your downtime, read up on federal regulations and keep tabs on all the changes as they happen
    • Pay an attorney to keep you abreast of these things
    • Hire someone on staff whose sole responsibility is keeping track of these things

    These are all good options, but many small business owners find the best option is to partner with a Professional Employer Organization, like GMS, that will not only keep you compliant but will also take on all the regulatory liability of your employees. 

    Recent studies show that small businesses that use PEOs grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business. Contact GMS today to learn how we can help take over these administrative burdens, allowing you to focus on your core business.

  • As an employer, understanding how to calculate payroll tax and income tax deductions is essential to running a compliant and efficient business.. A major part of that is making sure every employee’s paycheck has the correct taxes and other deductions withheld. Below is an overview of some of the most important payroll deductions for 2025, along with pointers on how to calculate them.

    Calculating Payroll Taxes for Employees

    The term payroll tax typically refer to Federal Insurance Contributions Act (FICA) taxes, which include both Social Security and Medicare contributions. For 2025, the employee-share rates remain:  

    • Social Security: 6.2% of gross wages
    • Medicare: 1.45% of gross wages

    This totals 7.65% for most employees, withheld each pay period. For example, if someone’s gross pay is $1,000:

    • Social Security withheld = $1,000 x 6.2% = $62
    • Medicare withheld = $1,000 x 1.45% = $14.50
    • Total Payroll Tax withheld = $76.50

    Meaning every paycheck for that employee will have $76.50 withheld.

    How to Calculate Federal Income Tax Deductions

    Unlike the flat rates for Social Security and Medicare, income tax deductions are determined by the employee’s Form W-4 and IRS tax tables. The IRS has 2025 Form W-4 instructions and updated tables in Publication 15-T. You can generally calculate withholding using either the wage bracket method or the percentage method.

    Wage bracket method

    This method uses easy-to-read tables. You simply:

    1. Look up how frequently you pay employees (weekly, biweekly, semimonthly, monthly, etc.).
    2. Choose the correct table based on the employee’s filing status (from the Form W-4) and whether they’ve checked the Step 2 box.
    3. Find the wage range in the table; the table cross-references the amount of tax to withhold based on any additional adjustments entered on the W-4.

    Percentage method

    This approach involves a bit more math, but it may be more flexible if your payroll amounts frequently exceed the ranges in the wage bracket tables. You will:

    1. Convert allowances (if you still have employees on 2019 or earlier W-4s) or interpret the relevant steps if they’re using a 2020 or later W-4. (For 2019/pre-2020 forms, note that the IRS publishes a “computational bridge.”)
    2. Subtract any allowances (or standard W-4 adjustments) from gross wages to get the taxable portion for that pay period.
    3. Apply the percentage method table.
    4. Add or subtract any additional amounts indicated on the employee’s W-4.

    Understanding State and Local Payroll Tax Withholding

    State And Local Taxes

    Federal income taxes aren’t the only concerns; many states and local governments require payroll tax withholding for state and local income tax deductions.. The method differs from state to state:

    • Some states (e.g., Florida, Texas) do not impose state income tax, meaning you only handle federal deductions.
    • Others (e.g., Ohio, New York) require both state and sometimes local income tax withholdings.
    • Check your state government’s website or official documentation for the 2025 rates and instructions.

    Additional (Voluntary) Paycheck Deductions

    In addition to required taxes, some income tax deductions are voluntary and may be either pre-tax (which reduce taxable income) or post-tax: These can include:

    1. Health insurance premiums for medical, dental, vision, etc.
    2. Retirement contributions (e.g., 401(k), IRA) chosen by the employee.
    3. Life insurance premiums paid via payroll deduction.
    4. Job-related expenses if you have agreed to recoup certain business expenses through paychecks (where legal).

    Ensure that these are set up correctly in your payroll system. Some might be pre-tax (reducing taxable wages), while others are post-tax.

    Why Payroll Tax Compliance Matters

    Staying accurate and up to date on payroll laws and tax tables is vital. Miscalculating payroll tax or income tax deductions can result in underpayment or overpayment, leading to potential penalties from the IRS or your state’s tax authority. It also impacts employees directly; over-withholding means smaller paychecks, while under-withholding can mean a big tax bill in April.

    • You’re responsible for timely depositing withheld taxes with the IRS, as well as filing the proper forms (like Forms 941 or 944 for federal payroll taxes).
    • For 2025, be sure you’re referencing the latest versions of IRS Publication 15 (Circular E) and Publication 15-T (2025) for the updated wage bracket or percentage method tables.

    Let GMS Simplify Your Payroll Tax Process

    Handling small business payroll taxes can be daunting, especially as forms and laws evolve each year. Group Management Services (GMS) can take the guesswork out of payroll tax and income tax deductions, ensuring accurate withholdings, filings, and tax deposits. If you’re:

    • Worried about maintaining compliance for 2025.
    • Unsure how to handle different forms (e.g., older 2019 W-4 forms vs. new 2025 W-4 forms).
    • Concerned about multi-state or local tax withholding.

    Group Management Services (GMS) can help streamline all aspects of your payroll tax management, from accurate withholdings to timely tax filings, allowing you to focus on growing your business. Contact GMS to learn more about our payroll tax services and how we can help you navigate the complexities of income tax deductions.

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

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

    Health Insurance

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

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

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

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

    Determining full-time equivalent employees

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

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

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

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

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

    Family Medical Leave Act (FMLA)

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

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

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

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

    FMLA Compliance requirements

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

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

    Miscellaneous State Laws

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

    Prepare Your Growing Business

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

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