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  • Maintaining records may not be the most glamorous part of running a business, but it is undeniably one of the most important. Without an effective records management system, businesses risk costly consequences, such as non-compliance fines, operational inefficiencies, or lost time spent tracking down essential documents. As regulatory requirements evolve and compliance becomes increasingly complex, adopting modern, efficient record-keeping solutions is more critical than ever. 

    The Regulatory Landscape 

    Businesses today face a patchwork of record-keeping requirements at the federal, state, and local levels. Here’s a quick overview of just how much employers need to juggle: 

    • Fair Labor Standards Act (FLSA) violations remain a significant source of fines. In FY2023, the U.S. Department of Labor recovered $274 million in back wages, with compliance efforts intensifying into 2025. 
    • IRS penalties for late payroll tax deposits can reach 10% of unpaid taxes if overdue by more than 15 days. Misclassification of workers as independent contractors are also a growing compliance issue, potentially leading to significant fines. 
    • OSHA mandates the retention of certain medical and safety-related records. Employers must keep records of work-related injuries and illnesses for at least five years following the end of the calendar year that the records cover. 
    • IRS guidelines call for tax records to be preserved for a minimum of seven years, depending on the document type. 

    Recordkeeping errors and omissions pose an additional challenge, especially with the Department of Labor and IRS implementing stricter audit protocols. Companies face fines or even litigation for noncompliance with federal and state regulations. Failing to meet these standards can result in hefty penalties, lawsuits, or even reputational damage. For example, in 2023, multiple businesses were fined tens of thousands of dollars for incomplete or missing employee records during routine Department of Labor audits. 

    Employers are increasingly turning to comprehensive HR and payroll software to streamline compliance. Such tools help businesses stay updated on state-specific regulations, automate records retention, and ensure timely reporting during audits.  

    Why Records Management Matters 

    Improved compliance and risk reduction 

    Inadequate record-keeping leaves employers vulnerable to regulatory audits and legal disputes. Proper systems ensure businesses have the right documentation readily available to demonstrate compliance with laws like the FLSA, the Affordable Care Act, and tax regulations. 

    Operational efficiency 

    According to Gartner, on average, four weeks are lost each year, waiting on misfiled, mislabeled, untracked, or lost documents. That’s time businesses can’t afford to waste, especially in small and midsize companies where resources are limited. Digital systems streamline retrieval, reduce filing errors, and automate data organization. 

    Data security 

    Safeguarding sensitive employee and financial information is non-negotiable in 2025. With the rise in cybersecurity threats, digital records management platforms with encryption and secure access protocols offer peace of mind and ensure that sensitive data doesn’t fall into the wrong hands. 

    The Shift To Digitization 

    Recognizing the inefficiencies of paper-based systems, organizations are moving towards digitization. The federal government has already embraced this transformation, with agencies like the National Archives and Records Administration (NARA) transitioning to fully electronic records management. For businesses, digitization means: 

    • Automation of record retention and disposal: Tools that automatically schedule records for deletion after their retention period reduce clutter and ensure compliance with laws requiring timely disposal. 
    • Centralized data management: Instead of searching through scattered filing cabinets or fragmented software systems, digital platforms allow businesses to consolidate records in one secure, accessible location. 
    • Cost savings: While transitioning to a digital system may involve upfront costs, businesses save significantly in the long run through reduced storage, retrieval, and administrative expenses. 

    Why This Matters For Employees 

    Employees also benefit from proper records management. Accurate payroll records ensure timely and accurate paychecks. Access to well-maintained personnel files can help resolve disputes, verify employment for loans or housing, and provide clear records of benefits and leave balances. Efficient systems create a smoother, more transparent workplace for everyone. 

    How GMS Can Help 

    At Group Management Services (GMS), we understand how challenging it is to navigate the complexities of record-keeping. Our technology simplifies record management by consolidating all your data into one secure platform. Our systems keep you updated on state and federal compliance requirements, automate document retention schedules, and make accessing critical records effortless. 

    With GMS, you’ll save time, reduce risk, and protect your bottom line—so you can focus on growing your business instead of worrying about audits or misplaced files. Contact us today to learn how our solutions can transform your records management strategy. 

  • As a small business owner, the day-to-day can feel like an endless cycle of putting out fires and being pulled in conflicting directions, leaving you with little to no time to work on the aspects of your business you’re most passionate about. However, HR can’t be ignored; it involves intricate and time-consuming tasks that demand ongoing attention. If mismanaged, your company could face harsh penalties and reputational harm that could take months or years to recover.

    While handling it all yourself may seem doable, as your business grows, it may not be possible to juggle the many moving pieces that make up successful and compliant HR policies and procedures – even with the best intentions, mistakes and oversights happen. Professional employer organizations (PEOs), such as GMS, help ensure nothing falls through the cracks.

    What Is A PEO?

    PEOs manage various HR tasks, such as benefits administration, payroll processing, recruitment, risk management, and other operations responsibilities. PEOs help safeguard your business against potential legal and reputational pitfalls. They specialize in maintaining compliance, ensuring that your HR policies align with federal and local employment regulations.

    In addition to compliance, they serve as a partner in the strategic management of HR functions. Through optimizing processes and introducing best practices, PEOs can significantly enhance your overall efficiency and productivity, which help attract and retain top talent.

    PEOs act as an extension of your business and provide the support needed to navigate the complexities of HR. While PEOs take on the administrative burdens of HR, they follow your lead. This arrangement ensures that your business’ core identity and operational direction remain firmly in your hands. In other words, PEOs don’t take over your business. Instead, they free up your time and energy by taking over the administrative aspects of HR processes so you can focus on core business activities such as strategic planning, business development, and customer engagement.

    Benefits Of Working With A PEO

    PEOs allow you to offer exceptional and competitive benefits to your team. PEOs pool their buying power and can negotiate with insurance and benefits vendors, giving you access to broader and more competitive benefits packages. These can include health insurance, dental and vision plans, retirement savings plans, and even wellness programs, which might not be possible for you to offer as a smaller business on your own.

    The ability to offer top-tier benefits packages can significantly impact your company’s recruitment and retention efforts. In a competitive job market, attractive benefits packages stand out to high-performing talent, making them more likely to join and stay with your company long-term.

    In addition, partnering with a PEO can lead to the following:

    • Financial savings: One way PEOs can save money is by reducing employee turnover costs. Not only is hiring simplified and faster, but partnering with a PEO can help refine your HR processes, helping with overall job satisfaction and retention.
    • Technology system access: Partnering with a PEO provides access to several technology platforms, including human resources information systems (HRIS), online payroll solutions, and more. These user-friendly platforms can seamlessly integrate with your existing systems, enabling straightforward access to employee information, report generation, and data storage capabilities.
    • Scalability: As your business grows, a PEO can quickly adapt to your changing needs, from adding new employees to expanding into new cities or states. This scalability can be a significant advantage for rapidly growing businesses.
    • Enhanced recruitment: PEOs equip you with the necessary tools and expertise for efficient employee recruitment, onboarding, and ongoing training processes. From creating a job posting to screening various candidates, PEOs free up your time so you only interview qualified applicants. Beyond screening talent, PEOs help establish a complete onboarding process, ensuring new hires are effectively integrated into your company and receive the training they need to succeed.
    • Employee development and training: Ongoing training is necessary to ensure your team is well-versed in their responsibilities and the company’s procedures. PEOs can help facilitate this through learning management systems (LMS), enabling you to establish and track employee training programs.

    Is A PEO Right For My Business?

    There are many factors to consider when deciding if a PEO is right for your business. First, it’s crucial to take inventory of your specific pain points. Are you looking for help with payroll, compliance, employee benefits, workers’ compensation, or all of the above? Understanding your needs will help you choose if a PEO is right for you.

    Additionally, consider the cost of a PEO. PEOs will save you time and money in the long run; however, it’s crucial to understand the pricing structure and compare it against the potential cost savings to ensure it’s truly the best decision for you.

    Overall, PEOs offer an excellent solution for small businesses aiming to develop and sustain a strong workforce. Securing top talent involves more than just an appealing job title; employees seek organizations that provide competitive benefits and have comprehensive processes and policies in place.

    HR With GMS

    Our goal is to help employers make their business simpler, safer, and stronger through dedicated HR support. We provide comprehensive HR solutions to companies small, medium, and large throughout the United States, allowing them to increase operational efficiencies, save money, and enhance the overall employee experience.

    With GMS, is a one stop shop, you won’t have multiple vendors providing multiple services. You get one team with years of experience managing HR, payroll and tax, benefits, and risk management. We provide:

    • Expertise: GMS offers a wide range of services and customized support. For the best fit, explore our offerings to ensure our capabilities align with your needs.
    • Peace of mind: GMS is a certified professional employer organization (CPEO), meaning we meet the requirements set by the IRS and can provide specific financial protections and tax benefits.
    • HR in a crisis: Are you ready to handle an HR crisis? GMS can help your business navigate various challenges, from handling sexual harassment complaints to managing workers’ compensation claims. We can ensure your policies remain current and your team is well-equipped to address any challenges. We are always ready to provide support during crises.

    Whether you know exactly what you need help with or aren’t sure where to start, our team is ready to help. Contact us today to connect with one of our experts!

  • As California’s entrepreneurial scene continues to flourish, it’s important for small business owners to stay ahead of the curve, especially when it comes to compliance with state legislation. One area often causing concern among employers is the California State Disability Insurance (SDI). A lack of clarity on how to accurately navigate these mandatory policies could have significant consequences for both the business and its employees. Fortunately, there’s help at hand, particularly for those companies collaborating with a professional employer organization (PEO).

    But before jumping right into the solution a PEO can provide, let’s first understand the specifics of the SDI and the changes in 2024.

    The California SDI In 2024

    The California SDI program divides short-term disability insurance (DI) and paid family leave (PFL) wage replacement benefits to eligible employees who need time off work. To qualify for DI, you’re unable to work due to a non-work-related illness or injury, pregnancy, or childbirth. You may be eligible for PFL to:

    • Care for a seriously ill family member
    • Participate in a qualifying life event (QLE) because of a family member’s military deployment to a foreign country

    On January 1st, 2024, California SDI implemented an employee contribution rate of 1.1% with no taxable wage base limit. Simply put, this indicates no cap on the maximum amount withheld from employees’ paychecks for contributions to the SDI. It’s a considerable change from the 2023 terms, where the SDI wage base was fixed at $153,164, with an employee contribution rate of 0.9% of annual earnings up to this wage base. For 2023, the highest possible contribution from an employee would have been $1,378.48, including the PFL surcharge.

    Although these changes can be overwhelming, they aim to ensure sufficient protection for workers during times of disability. In addition, the absence of a taxable wage base limit after 2023 signals a stronger SDI program, meaning greater security for the workforce. However, what does that mean for you as a business owner, and how does this affect your obligations?

    Understanding The Power Of A PEO

    A PEO provides comprehensive HR solutions for small businesses. Their expert knowledge of constantly evolving labor laws can significantly relieve the compliance burden on small business owners. A partnership with a PEO like GMS ensures your business remains in sync with legal changes and boosts your operational efficiencies. This allows you to concentrate on growing your business instead of being weighed down by legislative complications.

    For the upcoming changes in SDI contributions, a PEO would effectively manage the process, ensuring every cent withheld aligns with the revised employee contribution rate, and will diligently report and pay these amounts on your behalf. From determining correct withholdings to accurately processing payrolls and providing detailed, transparent reports for your records, a PEO ensures you’re up to speed and fully compliant.

    California small business owners need a steady hand to navigate these often tricky waters in a rapidly changing business landscape. By partnering with a PEO, you receive the HR support and expertise you need and peace of mind, knowing you’re adhering to all regulations. It’s time to free up your resources for what truly matters: running your business. Contact us today to learn more.