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  • On January 1st, 2023, the Internal Revenue Service (IRS) increased the standard mileage rate for paid transportation expenses. The new mileage rate will be 65.5 cents per mile which is up three cents from the second half of 2022. All miles driven for medical or moving purposes will remain at 22 cents per mile, and mileage for charitable purposes will remain at 14 cents per mile. For additional information regarding the updated business standard mileage rate, click here.

    Understanding Mileage Reimbursement

    In most businesses, employers would provide company cars to salespeople and executives who traveled often for business purposes. The employer would also pay for the car’s expenses, including gas, insurance, and maintenance. Nowadays, if a company doesn’t provide vehicles for their employees, they should reimburse employees’ car expenses with mileage reimbursement. With mileage reimbursement, employees receive a set dollar amount for every mile they drive for business purposes. While reimbursing your employees for using their personal vehicles is not a federal requirement, it’s essential that you adopt such practices to keep your employees from using their savings to fund business expenses.

    The following are considered qualified mileage reimbursement costs:

    • Business trips
    • Off-site meetings with clients and prospective clients
    • Running errands for business supplies
    • Deliveries

    Fortunately, the IRS makes it easy for business owners to determine how much they should be reimbursing their employees. The IRS sets a mileage rate for these costs, which are not taxable to your employees and are a deductible for your business. Should you choose a higher rate, you and your employees pay payroll taxes on the extra amount.

    Utilize GMS To Help With These Decisions

    While providing your employees with mileage reimbursement isn’t necessary, it’s a way to attract employees and let them know you care about them. When you partner with GMS, you gain access to our fleet management program. This allows business owners to organize and coordinate work vehicles to improve efficiency, reduce costs, and monitor unsafe driving habits. If you’re a small business owner and don’t have a fleet of cars, our HR experts work with you to set up a program so you can reimburse your employees for qualified mileage reimbursement costs. Contact us today to learn more.

  • For businesses located in areas affected by winter storms, it’s essential to familiarize yourself with wage and hour rules. There can be severe winter storms that prevent employees from coming to work. As a business owner, you may question if and when you need to pay employees affected by weather-related disruptions. Whether your employees are late for work due to road conditions, having to shovel their driveways, kids’ schools being closed, or even the business being closed, it’s critical that you understand your responsibility in all situations. However, the Fair Labor Standards Act (FLSA) and other state laws don’t stop, even during a blizzard.

    What You Must Know

    Employee pay ultimately comes down to the following factors:

    • Non-exempt status
    • Exempt status
    • State and Federal laws
    • Company policies

    Non-exempt status

    Pay for non-exempt, hourly employees is straightforward, with a few exceptions. Non-exempt workers are entitled to minimum wage and overtime pay when working more than 40 hours per week. These workers are to be paid for the hours they work. If the employer closes the business early or the employee is late due to road conditions, they only need to be paid for the time they work.

    However, in some states, there are laws in place for “reporting time pay” or “show-up pay” that requires non-exempt employees to be paid for a certain number of hours whenever the employees report to work as scheduled, even if work isn’t available. In addition, state and city laws could affect an employee’s pay, which requires an employer to allow an employee to use paid leave for an absence related to a snow emergency or school closing. As laws vary from state to state, you must stay on top of the ever-changing rules and regulations.

    Exempt status

    Exempt employees do not receive overtime pay and don’t qualify for minimum wage as they are typically paid a salary rather than by the hour. During the winter months, when roads are dangerous, and businesses shut down, it matters whether the employer is closed for business, or the employee is unable or unwilling to come to work because of the weather. For example, if a business is closed because of weather conditions, exempt employees must be paid their normal salary for the week if they’ve worked at least one day throughout that week.

    However, if the business is open but the employee chooses not to come in due to a storm, then the FLSA permits the employer to treat that as personal time off. Should an employee arrive late or leave early due to poor driving conditions, the FLSA does not permit employers to deduct partial days from these workers’ wages. Depending on state or local laws, it could require more from an employer than federal law does.

    Let’s Have A Compliant Winter Season

    Any business owner who has experienced winter storms understands it can have a drastic effect on one’s business. From having to shut your business down for the day to employees not coming to work due to dangerous driving conditions, you’ve been there. It’s time to have a safe and compliant winter season and partner with GMS. Our experts can help you navigate the intricacies of wage and hour laws. Megan Wagner, PHR, GMS’ Client Services Manager, emphasizes, “One of the biggest ways employers can prepare for winter is to develop handbook policies addressing inclement weather. These policies should include details on how employees will be notified if the business closes, whom they should notify if they are unable to make it to work, and who is eligible to work remotely when conditions preclude commuting into the office. You also must consider if your non-exempt employees can work remotely for part of the day, and how a later commute should be noted on their timesheet. Companies are required to comply with FLSA guidelines regardless of weather conditions, so employers need to understand how to manage exempt versus non-exempt time.”

    Contact us today to learn more.

  • The tax rates used on Arizona’s withholding certificates are decreasing for 2023. The Arizona Department of Revenue (DOR) updated Form A-4 to reflect lower personal income tax rates. To view and download the updated form, click here.

    All employers in Arizona are required to make the 2023 version of Form A-4 available to their employees by January 31st, 2023. The DOR requires all employees to complete and submit a new Form A-4 for 2023. For any employee who fails to fill out the new form by February 15th, 2023, the default withholding rate will now be 2% instead of 2.7%. Federal Form W-4 is not an acceptable substitute for state withholding purposes.

    Stay Compliant, Partner With GMS

    Changing rules and regulations make it challenging to focus on growing your business. When you partner with GMS, you gain experts in all fields of your business, including HR, payroll, risk management, and benefits. We ensure you remain compliant and stay up to date on all new rules and regulations. Contact us today to learn more.

  • Between making high-stakes decisions, budgeting, and strategizing, it’s safe to say business owners have their hands full. However, with a growing business comes more employees and a greater need for a reliable human resources team. This sounds like a great idea until business owners realize how expensive an in-house HR team can be, not to mention how much work goes into building one.

    But what if we told you about another alternative? HR outsourcing is the solution to all your HR problems, no additional staff is needed. If you’re not sure what all HR Outsourcing entails, we’re here to help!

    What Is HR Outsourcing?

    HR outsourcing is the practice of delegating some or all of an organization’s human resource functions to a third-party service provider. This can include functions such as payroll, benefits administration, recruiting, training and development, employee relations, and more.

    It allows companies to focus on their core competencies while outsourcing the complex aspects of HR management. Companies that outsource HR services can focus on improving their core business processes and procedures without having to worry about managing the day-to-day operations related to human resources. Sounds like a win-win!

    What Does HR Outsourcing Include?

    Outsourcing your HR department can save you money while also providing you with access to a wide range of resources. You’ll gain access to a dedicated team that can handle all your staffing needs without ever having to worry about hiring an employee or finding space for them in your office. The following are a variety of services that HR outsourcing includes:

    Benefits

    Putting together a benefits package takes work, but with HR outsourcing, all the benefits you want to provide for your employees are rolled into one package. If you use a professional employer organization (PEO) for this, they can give you access to high-quality, affordable benefits while also assisting you throughout the entire process. These benefits can include:

    • Access to top health care, dental, vision, life, short-term disability, long-term disability, and other types of insurance
    • Voluntary benefits and employee assistance programs
    • COBRA administration
    • 401(k) plan and administration
    • Section 125 plan administration
    • Paid time off (PTO) tracking

    Payroll

    Payroll is yet another time-consuming and challenging task for business owners. But with payroll management services, paying your employees is completely hands-off and handled by a professional. Small and mid-sized companies spend an average of $2,250 per employee per year to manage payroll, and if you’re doing the math right, that’s a significant amount of cash. Payroll management allows you to save money and gives you peace of mind knowing your finances are in good hands. These services often include:

    • Payroll processing
    • Payroll software
    • Payroll tax management
    • Employee self-service

    Human resources

    HR doesn’t just stop at payroll and benefits. There are many functions when it comes to human resources management such as recruiting and retaining talent, tracking vacation time and having a trained professional to answer employee questions. HR outsourcing companies allow you to spend more time growing your business and less time on human resource management.

    Risk management and workplace safety

    Lastly, risk management and workplace safety are among the most important services. U.S. employers are responsible for dealing with the consequences of workplace injuries. According to OSHA, millions of workers suffer serious job-related injuries or illnesses every year. In addition to the resulting downtime and lost productivity, these incidents result in workers’ compensation claims for employers, increasing their insurance rates. Taking proactive measures can help create a safer work environment for your employees, which HR outsourcing companies can assist with.

    How Outsourcing HR Services Can Benefit Your Business

    A few years ago, the term “HR outsourcing” was a foreign concept to most people. But today, it’s becoming more common for companies to outsource their human resources management responsibilities to third parties.

    It’s easy to see why there are many benefits to outsourcing your HR functions, including reduced costs and increased efficiency. The following are additional benefits HR outsourcing includes:

    • Flexibility: You have the ability to choose how many employees you want to hire and how much time you want them to work. In addition, you can adjust your needs, which might mean adding or removing employees from your team depending on the season or other factors.
    • Cost savings: By outsourcing your HR functions, you can save money by not having to hire an entire department of people just for HR tasks. This can help reduce costs while still providing the same level of service as if you were hiring an entire team internally.
    • Efficiency: Outsourcing allows companies with limited resources or expertise in specific areas, such as compliance or payroll management, to receive additional help. This way, they have support from outside experts who specialize in those areas without having to hire an entire team internally (e.g., only payroll experts).

    Difference Between A Professional Employer Organization (PEO) And HR Outsourcing

    As we’ve covered, HR outsourcing is the act of outsourcing the functions of human resources to a third party. A PEO, or professional employer organization, is an organization that provides these services. They are not a staffing agency, and they don’t just provide payroll services—they provide all the administrative support that comes with managing employees, including benefits administration, employee screening, recruitment, payroll processing, and tax reporting.

    In addition to providing administrative support for your business operations, PEOs also offer several other benefits:

    • Reduced risk: By outsourcing HR functions, you’re able to reduce your legal liability and exposure to regulatory fines by hiring professionals who specialize in these areas.
    • Improved efficiency: PEOs can process paperwork faster than you could ever hope to do on your own — saving you time and money!
    • Hassle-free administration: Many small businesses find it difficult to keep up with the ever-changing regulations required by law. Outsourcing those responsibilities allows you to focus on what really matters—running your business.

    Common Myths About HR Outsourcing

    HR outsourcing is surrounded by many myths however, we’re here to set the record straight. The following are the most common myths we’ve heard, and why they aren’t true:

    Myth: You’ll have to deal with a bunch of different people from one company who all have different ideas about how things should be done.

    Reality: A PEO is made up of experts in their field, so you won’t have to worry about having multiple people working on your account. You have one HR expert as your point of contact. There’s no more calling a 1-800 number and having to wait on hold.

    Myth: It’s expensive.

    Reality: Most PEOs charge on a per-employee basis, and you are only paying for what your staffing levels required. This saves you money in the long term.

    Myth: You’ll be losing control over your employees.

    Reality: If you’re outsourcing your HR functions, you’ll be able to maintain your own compliance standards alongside their services, including employee benefits programs and payroll management. You’ll also have access to all their resources, so if there are any issues with your employees’ performance or attendance policies, you can contact them directly instead of having to wait for an answer from someone.

    Myth: A PEO is the same as a staffing agency.

    Reality: PEOs don’t hire people on behalf of clients. Instead, they provide them with all the tools they need to manage their own HR needs themselves-from recruiting to hiring to payroll administration. They do this by working directly with clients’ existing employees to make sure everyone has what they need to do their jobs well and efficiently—and that no one falls through the cracks.

    Who Should Use HR Outsourcing? 

    You may have read this far and are still wondering whether HR outsourcing is a good move for you. But believe us when we say HR outsourcing is truly for every business, big or small. HR plays a critical role in protecting your business from legal issues and creating the right policies, practices, and strategies. Without a solid HR team, your business will likely face these issues:

    • Compliance risks
    • Bad hiring practices
    • Low morale and toxic work environment (sexual harassment, bullying, discrimination, and more)
    • High turnover rates
    • Poor performance

    Any of these issues could seriously derail your business. What if you’re not sure if it’s right for you? Here are questions to ask yourself when deciding:

    • Do I need to add or change my company’s benefits package?
    • Are there any HR processes that are taking up too much time?
    • Do I have specific knowledge and expertise in an area that isn’t related to my core business? (For example, if you’re an insurance company and want to start offering 401(k) plans but don’t have the knowledge or experience in this area.)
    • Have my employees brought various HR issues to my attention? 
    • Do I feel like my time would be better suited somewhere else?
    • Could I provide more benefits or HR services to my employees?

    Where To Get HR Outsourcing

    All of this information about HR outsourcing may have given you a better understanding of what is provided, but you may not know whom to choose. With GMS, you can be sure that your HR outsourcing is handled by trained professionals who understand the industry and have the experience to get the job done. We’ve got a team of experts who can help you find the right people for your business and manage them so that they’re at their best. We also offer benefits administration, payroll services, and more. If you’re interested in learning more about what we can do for your business and how we can help you reach your goals, contact us today!

  • Various cities and states have begun announcing the implementation of pay transparency. As of November 1st, New York City employers are required to disclose the salary range on job advertisements. Pay transparency must be placed on job advertisements rather than being placed only in offer letters or upon request of applicants or employees.

    The city’s law correlates with what has been picked up by other jurisdictions such as:

    • California
    • Colorado
    • Washington

    Start With Your Job Listings

    According to the Society for Human Resource Management (SHRM), employers with at least four employees must include the following in any advertisement for a job, promotion, or transfer opportunity:

    • Minimum annual salary
    • Maximum annual salary
    • Hourly range of compensation

    When it’s a commission-only position, employers are not required to post the exact salary. Instead, the posting can be satisfied by general statements. Employers are covered by stating the commission ranges. When writing job descriptions for your open positions, ensure they are direct and specific. It’s essential to provide the candidate with an understanding of the job by including the basic job functions.

    Rely On GMS

    As a business owner, it’s challenging to remain compliant when regulations constantly change. However, when you partner with GMS, our HR professionals have you covered. Our HR specialists are aware of changes as they occur within your state. In addition, our recruiting team can build competitive job descriptions that meet regulations to protect your business. GMS will also conduct market analyses to provide you with a pay range that aligns with your open positions. Learn more today!

  • At 2:00 a.m. on November 6th, 2022, daylight savings time ends. Daylight saving time (DST) is the practice of setting clocks forward one hour from standard time during the spring and summer months. In the fall, you set the clocks back an hour to use natural daylight more effectively. Continue reading to learn its effects on business owners.

    The Purpose Of Daylight Saving Time

    This practice became federal law in the United States when President Lyndon Johnson signed the Uniform Time Act in 1966. The idea behind daylight savings is to maximize sunlight in the Northern Hemisphere as days get longer in the spring. Individuals gain an extra hour of sunlight by springing forward their clocks and falling back. However, the benefits of this practice tend to be controversial, and the shift can have measurable impacts on health. As an employer, it’s essential that you understand the following considerations as we prepare to set our clock back on November 6th.

    The period from 1:00 a.m. to 2 a.m. 

    If you have employees working on November 6th at 2:00 a.m., you may be required to pay those employees for one additional hour of work. It’s only required if the time change extends the number of hours worked. The Fair Labor Standards Act (FLSA) states that all hourly employees must be paid for all hours worked. On this specific day, your employees will have worked the hour from 1:00 a.m. to 2:00 a.m. twice. As the employer, you could modify these employees’ start and end times to avoid this conflict.

    Overtime obligations to consider

    It might also count towards overtime compensation if you choose to pay your nonexempt employees for that additional hour of work between 1:00 a.m. and 2:00 a.m. This could result in a workweek of over 40 hours or a workday of over eight hours. Prior to November 6th, you must determine your employees’ overtime compensation for the day and week to ensure you comply accordingly.

    GMS Is Here To Help

    While you have probably tackled daylight saving time before, it’s essential that you comply with all rules and regulations. At GMS, we understand you don’t have the time to sit down and read a rule book of everything you must comply with. In addition, payroll management is a long and tiring process. Stop spending time worrying about payroll and start spending time growing your business. Partner with GMS so you can have that extra hour on November 6th. Contact us today.

  • The California minimum wage is increasing to $15.50 an hour for all employers beginning January 1st, 2023. This new rate reflects an adjustment to the large employer minimum wage, which is currently $15 an hour. Joe Stephenshaw, California’s Director of Finance, determined the increase based on inflation. For small business owners, it’s essential to know that your employee’s minimum wage will also be increased to $15.50 an hour instead of its current rate of $14.00 an hour.

    Since there has been an 8.3 percent increase in inflation over the past year, multiple states have implemented higher minimum wages. The cost of food, shelter, and medical services has increased significantly over the past few months. The price of basic staples, including eggs and bread, has spiked, straining household budgets. Raising minimum wage rates would improve the overall standard of living with a more feasible income level to survive these unprecedented times.

    The California Labor Code 

    The California Labor Code is a collection of civil law statutes for the State of California. It’s made up of statutes that govern the general obligations and rights of individuals within the jurisdiction of the State of California. Workers are entitled to various rights and protections under California labor law. As inflation has impacted many individuals, the California Labor Code established the schedule for minimum wage increases. This includes an annual adjustment based on inflation taking effect with the 2023 large employer minimum wage.

    Every year, there will be adjustments to the state minimum wage based on inflation, with the announcements made on August 1st. In addition, the California Labor Code requires all small employer minimum wage rates in 2023 to match the large employer minimum wage rate if inflation has exceeded 7%.

    What Small Business Owners Need To Know

    As a small business owner during these challenging times, you must ensure you stay on top of the ever-changing rules and regulations. In addition, your employees are your biggest asset. When you partner with GMS, we ensure you are paying your employees the correct amount each year. As inflation and the COVID-19 pandemic have affected many individuals and companies, numerous businesses have looked to increase their minimum wage prior. Our team ensures you offer the best possible wage to your employees, allowing you to attract and retain your top talent. Contact us today to learn more.

  • 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.

  • If you’re a small business owner, you understand there is never enough time to complete everything necessary to run your business. There is quite a bit on your plate from running sales, day-to-day operations, and dealing with issues that arise. On top of that, there is a slew of HR-related duties that need to be performed. Let’s look at the overwhelming number of tasks that HR must deal with and the time it takes to complete each one.

    Payroll

    It is estimated that small businesses spend five hours per pay period processing their payroll. Eighty percent of small businesses process payroll weekly or biweekly. Not only does processing payroll take a great deal of time, but nearly half of those who calculated payroll found it confusing and frustrating.

    Compliance

    Compliance is another time-consuming task for small business owners. A report shows that 14% of small businesses spend more than 20 hours working through federal regulations each month, while 25% of owners lose more than 10 hours of productivity to regulatory compliance. As laws and regulations are constantly changing, it’s vital to stay on top of them, ensure you are compliant, and avoid fines. Additionally, diverse labor laws across cities and states can complicate the process further.

    Benefits

    On average, 1.6 hours are spent each week on employee benefits. An average of eight hours is spent on benefits during the open enrollment period. Thirty-seven percent of businesses say there is a moderate to heavy amount of paperwork involved while managing employee benefits. Benefits should not be overlooked, given that it’s an important tool to retain workers.

    Hiring And Recruiting

    As if all the above wasn’t hard enough, it takes a business a significant amount of time and energy to hire and recruit employees. The time it takes a business to find and hire an employee is the biggest time strain. This process could take up to 30 hours to hire one new employee.

    The most time-consuming hiring tasks include:

    • Interviewing candidates – seven hours
    • Searching for candidates – six hours
    • Reaching out to candidates – six hours
    • Vetting candidates – six hours
    • Researching best practices – five hours

    This is very time-consuming for a small business to take on this task on its own. In addition, if you hire the wrong candidate and they either leave or are fired, it costs six to nine months of that person’s salary.

    GMS Is Here To Take On These Time-Consuming Tasks

    Group Management Services specializes in payroll, HR, benefits, and risk management. Not only will GMS save your business time and money, but we will take on the additional stress and frustration of completing these tasks. This allows you to focus on growing your business while maintaining compliance. Contact GMS 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.