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  • The landscape of employment regulations can be tricky for employers and employees to navigate. In New Jersey, recent changes to the unemployment insurance law have left many employers wondering about their compliance obligations. Fortunately, the New Jersey Department of Labor (DOL) has released new guidance to help employers understand and adhere to the amended law’s requirements. Continue reading to understand what these changes mean for businesses in New Jersey.

    Delayed Rollout And Fair Enforcement

    One of the first aspects to note is that the New Jersey DOL recognizes employers’ challenges due to the delayed rollout of the amended law. In response, the agency has pledged to enforce the law fairly and equitably, considering the delayed guidance’s circumstances.

    A significant concern for employers was the lack of clear instructions on what information they must provide to the Division of Unemployment Insurance when an employee separates from their job. The department acknowledges this issue and clarifies that employers are not expected to provide this information until they receive specific instructions.

    Preparing For Compliance 

    The department actively provides clear directions to employers to address the informational gap. In addition, they’re developing an online form that will streamline the submission process for employers. While these developments are in progress, the department has already requested that all employers register with the online platform, Employer Access, and provide an email address to the Division. This measure ensures employers can communicate electronically, as required by the amended law.

    Employers must understand that the new law does not mandate immediate submission of the BC-10 form upon an employee’s separation from employment. Instead, the only information required to be provided immediately is when unemployment will begin. However, employees should note that they are not expected to provide this information until the department issues clear submission instructions.

    Enforcement Leniency

    The department has demonstrated a practical approach to enforcing the amended laws in a positive development for employers. They’ve indicated that they will not assess penalties against employers or block them from obtaining relief of benefit charges for failing to provide information immediately upon an employee’s separation. This leniency will apply while the department finalizes the submission directions and revises the necessary forms.

    Employers must continue to respond promptly to all requests from the Division for separation and wage information during this transitional period. While the amended law has shortened the appeal deadline from 10 days to seven days, the department is exercising discretion. They will accept appeals submitted within the previous 10-day limit until the transition from postal to electronic communication with employers is complete.

    Stay Updated By Partnering With A PEO

    In the ever-evolving landscape of employment regulations, it’s essential for employers to remain adaptable, proactive, and compliant. Keeping a close eye on updates from the DOL and seeking legal counsel when necessary will help businesses maintain a smooth transition to the amended unemployment insurance law.

    However, as a small business owner in New Jersey, adding another task to your plate is the last thing you want to do. Luckily, GMS, a professional employer organization (PEO), is here to lend a helping hand, navigating the intricacies of employment regulations. At GMS, we provide you and your business with the following:

    • Compliance expertise
    • Administrative relief
    • Tailored solutions
    • Cost savings
    • Risk mitigation
    • Employee support
    • Focus on growth
    • And so much more

    Ultimately, the constant change in employment regulations demands vigilance and expertise, which can be challenging for small business owners to manage independently. GMS, as a trusted PEO, offers a comprehensive solution that ensures compliance with the amended unemployment insurance law in New Jersey, streamlines your HR process, reduces costs, and allows you to focus on what you do best – growing your business. Contact us today to learn how we can help your New Jersey business thrive.

  • In August, employers slowed hiring, pointing to a cooling labor market and rising interest rates. The Labor Department reported that employers had added 315,000 jobs in August, a major downfall from 520,000 in July. The unemployment rate rose to 3.7% from 3.5%. Economists say the rise in unemployment represents individuals who began looking for work and were counted as unemployed.

    The continued growth of jobs shows that the economy continues to expand, even as the gross domestic product contracted during the year’s first half. Hiring has been one of the bright spots in this slowing economy. Employers have added an average of 380,000 jobs each month over the past three months. While the government has estimated the economy has shrunk in the first six months of 2022, an informal definition of a recession, employers still increased jobs.

    Overview Of August

    Wage growth in August continued to slow, with average hourly pay rising 5.2% for all workers and 6.1% for production and nonsupervisory workers. Nonsupervisory workers exclude managers and make up more than 80% of the workforce. Consumer prices have increased 8.5% in the last 12 months. As a result, most employees’ paychecks aren’t keeping up with the rising costs. In August, employers added:

    • 68,000 jobs in professional and business services
    • 48,000 in healthcare
    • 44,000 in retail
    • 31,000 in leisure and hospitality 
    • 22,000 in manufacturing

    What The Future Looks Like

    While the economy is facing unprecedented times, economists have given encouraging signs in recent reports. The participation rate, which measures how many people are working or looking for jobs, rose to 62.4%. This now matches its level in March, which marks a post-pandemic high. While many industries have recovered from the jobs lost during the COVID-19 recession, some businesses are still falling behind. Even though the overall economy is at a turning point, the labor market seems to be on the rise.

    How GMS Comes Into Play

    While no individual can necessarily predict what the future holds for businesses, there are specific steps you can take to be proactive. While unemployment is rising, what can you do as a business owner? If you have open positions but are struggling to fill those with quality talent, GMS is here to help. Our HR experts are here to write enticing job descriptions, advertise open positions, and conduct interviews to find the best talent for your business. Fear no more. GMS is here to make your business simpler, safer, and stronger. Contact us today to get started.

  • While there have been multiple signs that the labor market is weakening, the number of Americans who filed for unemployment benefits has increased again. Over 260,000 workers filed for new unemployment benefits throughout the last week of July.

    In earlier months this year, the labor market had been one of the few bright spots in the economy. The unemployment rate remained steady at 3.6% for the fourth consecutive month, reaching a historic low. However, with unemployment claims rising to the highest level since November 2021, businesses such as Apple, Walmart, and Microsoft, are announcing hiring freezes and/or layoffs.

    The U.S. government announced that businesses had posted fewer positions amid concerns that the economy was weakening. In fact, for every unemployed individual, there are currently almost two job vacancies.

    Unemployment Claims Management

    The unemployment claims process can be cumbersome between changing compliance regulations and increasing costs for small business owners. Your company’s bottom line can be severely affected by rising unemployment insurance rates due to an increase in unemployment claims. When you partner with GMS, you no longer need to spend time trying to protect your business from unemployment claims and taxes. Contact us today.

  • Employee layoffs are never easy, but factoring in the unemployment claims process can add even more stress and confusion to the situation. Unemployment benefits are designed to protect employees from unexpectedly losing a source of income. As an employer, you have certain responsibilities regarding unemployment, from maintaining accurate employee records to paying unemployment taxes. 

    Because these benefits can impact your business’ tax rates, it’s essential to understand these responsibilities and how small business unemployment claims impact your business. Let’s break down how unemployment insurance works and what you can do to manage future unemployment claims.

    How Does Small Business Unemployment Insurance Work?

    Unemployment insurance, also known as unemployment benefits, is a short-term, state-provided benefit that provides money to eligible employees who have lost their job. The specific eligibility requirements for employees can vary by state or due to COVID-19 unemployment insurance relief measures. However, eligible employees typically need to meet the following requirements.

    • They must have been an employee.
    • They lost their job through no fault of their own (e.g. if an employee was fired because of poor performance, they would not be eligible).
    • They should be completely or partially unemployed (an employee is considered partially unemployed if they worked less than a full week at the time they lost their job).
    • They’ve worked enough hours and earned enough wages in their base period, which is the first four of the last five quarters. For example, employees in Ohio are eligible for unemployment benefits if they’ve worked for at least 20 weeks and earned an average weekly wage of $247 during the base period. However, these specific requirements can vary by state.

    When an employee is laid off, they can file a claim to receive unemployment benefits. If the claim is approved, the employee will receive weekly payouts. The amount they receive is based on the state’s budget and how much they earned at their previous employer. 

    What are Small Business Owners’ Responsibilities Regarding Unemployment?

    The best way to be fully prepared for an unemployment claim is to understand your responsibilities as an employer. There are three key responsibilities that you’ll have as an employer.

    • Paying Federal Unemployment Tax Act (FUTA) and State Unemployment Tax Act (SUTA) taxes
    • Properly classifying employees
    • Keeping accurate and detailed employee records.

    Unemployment taxes

    Although small business unemployment insurance is a benefit provided by the state, employers fund this benefit with their taxes – even when they don’t have any unemployment claims against them. As a small business owner, it is your responsibility to pay a variety of taxes, including FUTA and SUTA taxes. 

    Federal Unemployment Tax Act (FUTA)

    The FUTA tax rate is 6%, which is applied to the first $7,000 in each employee’s wages – up to $420 per employee. However, filing your Form 940, the form used to report your annual FUTA tax, may allow you to receive a credit of up to 5.4%. This credit could make your payment as low as $42 per employee.

    Employers are responsible for paying FUTA taxes quarterly based on how much they owe. If a business owes less than $500 in a quarter, it can carry this balance forward until its liability is more than $500. Once a business hits the $500 threshold, the employer can pay FUTA taxes via the Electronic Federal Tax Payment System. These payments are due by the last day of the month after the end of the quarter.

    Although employers might be required to pay their FUTA taxes throughout the year, they still need to file their Form 940 annually by Jan. 31. For employers who paid all FUTA taxes when they were due, the filing date is extended to Feb. 10.

    State Unemployment Tax Act (SUTA)

    Whereas all employers pay a flat rate for FUTA taxes, SUTA taxes – its state-based counterpart – vary based on several factors.

    • Your state’s SUTA tax rate range
    • How long your business has been around
    • Your industry

    To find their SUTA tax rate, employers must register the business with their state. After registering, the state will assign them a new employer rate. This rate can be updated as often as every year based on the employer’s “experience rating,” which looks at how much the employer has paid in taxes and how much they’ve been charged in benefits. If an employer has employees who work in a different state than the business, they are responsible for paying SUTA taxes in those respective states as well.

    These taxes are also typically due quarterly. Employers must report wages and employee information to their state to determine their tax liability.

    One important factor to keep in mind is that when employees make a successful unemployment insurance claim against an employer, that employer’s SUTA taxes can increase significantly for up to three years. This rate increase is part of why accurate employee classification and records are essential responsibilities for a small business.

    Proper employee classification

    Employees are classified into different groups based on several different factors, including the number of hours they’re expected to work and if their role is permanent. Misclassifying employees can have serious penalties, such as paying fines to multiple government offices, FICA taxes, interest on unpaid taxes, and possibly wage claims as far back as three years. As such, it’s important to accurately classify each team member. The types of employee classifications include:

    • Full time
    • Part time
    • Special classes, which include interns, freelancers, and independent contractors

    A common concern regarding classification is knowing the difference between an employee and an independent contractor. While an employer may classify someone as an independent contractor, the IRS may not agree and penalize your business for noncompliance. The IRS looks at the degree of control an employer has over the worker and the type of relationship they have. For example, the IRS uses the following criteria to identify proper employee classification.

    • Employers can give specific, detailed instructions to employees regarding their work, as well as provide training and evaluations for how the employee completed their task. Independent contractors generally have more freedom to complete their tasks. 
    • Employees are usually reimbursed for work expenses, have a regular payment schedule, and don’t need to personally invest in work-related equipment. Independent contractors are commissioned as needed and responsible for their own equipment, which can give them a higher profit or loss risk.
    • Employees generally receive benefits, are hired for a long-term permanent role, and provide work that is considered key to the business. Independent contractors may be hired for short-term projects and provide services that aren’t considered critical to the business.

    These classifications determine the types of benefits the employee can receive as well as the expenses the employer is responsible for paying. For example, an independent contractor is not eligible to receive unemployment benefits, which also means that the employer isn’t required to pay FUTA or SUTA taxes for that employee. Not every type of employee is eligible for unemployment benefits, so properly classifying each employee will help determine their eligibility if they make a claim.

    Accurate employee and HR records

    Maintaining accurate and up-to-date HR records could also factor into the claims process. For example, a former employee files for unemployment benefits, which inherently implies they lost their job through no fault of their own. However, their supervisor had several documented discussions with the employee about poor performance and misconduct, and HR records indicate this person was fired. 

    Having these records on hand will be helpful should the employer choose to contest the claim. Additional records that could be relevant in the unemployment claims process include:

    • Personnel records, such as I-9 forms, performance reviews, etc. These records should be kept for one year if the employee is terminated, according to the Equal Employment Opportunity Commission.
    • Payroll records, which should be kept for at least three years according to the Department of Labor (DOL).
    • Timecard records, which should be kept for at least two years according to the DOL.

    Although there are federal guidelines for how long to keep certain records, check with your state for additional recommendations. For example, the Ohio Department of Job and Family Services require that employers keep their employee records, including hours worked and wages paid, for at least five years.

    Reporting new hires to the state can also help prevent fraudulent unemployment claims. Each state has an online portal where employers can submit new hire information, which includes the employee’s name, home address, social security number, and hire date. The state compares this information against unemployment benefit claims to determine if any claims are illegal.

    How Does the Unemployment Claims Process Work for Employers?

    After an employee files for unemployment benefits, the employer is notified by your state’s unemployment office. This office could be known as the Department of Labor, Department of Jobs, and Family Services depending on your location. Once notified, you’ll be asked to verify details about the employee and the claim, including:

    • The employee’s classification
    • The reason for the employee leaving

    After reviewing the details of the claim, it’s up to the employer to accept the claim or contest it.

    Not contesting an unemployment benefits claim

    The simplest response is not to contest an employee’s unemployment claim. Even though there are tax consequences to unemployment benefits, an employee is entitled to unemployment if they have a legitimate claim. Be sure to review all the information on the claim to make sure it’s accurate and correct against your records. If so, it’s best to comply since fighting against a legitimate claim will only cost you more time and money.

    Contesting a claim

    While you shouldn’t take action against legitimate claims, there are several instances when it makes sense to contest a claim:

    • If an employee has submitted false information on their claim
    • If their classification doesn’t allow them to receive unemployment benefits
    • If they quit or were fired for performance or misconduct

    If any of these reasons apply, contest the claim quickly and within your state’s fact-finding timeframe – usually 10 days. The employer will need to provide accurate documents to support any information that opposes the details submitted with the claim, including the correct employee classification or proof that the employee was fired with cause. 

    After contesting the claim, all information will be reviewed and both parties will receive notification of whether the claim is allowed or denied. Keep in mind that in either case, both parties have a period of time to appeal the decision.

    Protect Your Business With Unemployment Claims Management

    Managing small business unemployment claims can be confusing and time consuming. Considering your responsibilities as an employer – such as paying FUTA and SUTA taxes, correctly classifying employees and maintaining accurate records, and monitoring and responding to unemployment claims – it’s possible that a small oversight can lead to significant consequences for your business.

    If you’re looking for an easier way to handle the unemployment insurance process, partnering with the right PEO can help you protect your business. Contact GMS today to talk to our experts about how we can take the stress out of managing unemployment claims and other critical HR functions.

  • When I was little my mother always told me that “patience was a virtue”. That was always her response when my sister and I would bother her with the all too famous phrase of “Are we there yet?” during our annual family vacation trips. Little did I know that the phrase she would tell us would come in handy down the road in my career and more specifically, in the realm of unemployment claims management.

    The first thing I ask our clients when discussing a disqualifying separation of an employee is whether they followed their progressive disciplinary policy and if they kept a clear and concise record of the infractions that the employee committed. Every once in awhile they will respond with “Jane Doe was simply a poor worker who couldn’t get the job done. I knew that she wouldn’t be able to improve so I went ahead and let her go.” Because the State of Ohio is an At-Will State, this is perfectly fine and the employer is within their right to do so. Unfortunately, At-Will termination does not equal “for cause” termination, especially when it comes to unemployment claims management and ODJFS. When an employer discharges an employee, the burden of proof that the termination was with just cause is on the employer. Whether you terminated the individual within the first 90 days of employment or 5 years after hire, ODJFS will ask for a thorough record of evidence that establishes the claimant’s actions were a disregard for the standards of behavior the employer can rightfully expect form their employees. This is why having a comprehensive handbook and a thorough progressive disciplinary policy is important.

    First and foremost, have all of your employees sign off on an acknowledgement that states they have read and understood your company handbook. This portion is overlooked more often than not and along with an excerpt of the policy, is the most common document ODJFS will request when investigating a termination. Further, always enact your progressive discipline policy. This often includes verbal warnings, written warnings, performance improvement plans/suspensions, and the eventual termination. The Unemployment Office will look for any excuse to allow a claim, so documenting that you notified the employee of their wrongdoing and provided them with a path of improvement upon their mistakes will show ODJFS that you made a concerted effort to keep the claimant employed and that you use termination only as a last resort. By following these steps you will be able to provide ODJFS a detailed log of information that accurately and factually details the reasons why the termination was for cause.

    I’m proud to say that GMS boasts a 96.7% winning percentage on all “for cause” unemployment claims, which I would largely attribute to our clients following the aforementioned advice. By taking 10 minutes out of your day to explain your handbook or enact a reprimand, you could save as much as $13,000 per claim, something to think about before you decide to terminate an employee without the proper documentation. Patience is not only a virtue, but is also a money saver. 

  • The unemployment process isn’t an easy one, both for the former employee and the employer. While many small- and medium-sized companies view unemployment as an unmanageable major expense, there are ways that you can save money so that the process isn’t as much of a threat to your company’s cashflow.

    Professional Employment Organizations (PEO) can protect your business from unemployment claims, while helping your business’ bottom line, allowing you to focus on the future without being held back by the past.

    Work with a PEO to help your bottom line when it comes to the unemployment claims management.

    How Much Can Unemployment Really Cost Me?

    That can depend on a couple of things. After taking in factors like your state, company size, and unemployment claim history, unemployment taxes can cost your business anywhere from hundreds of dollars to tens of thousands of dollars per year.

    Protecting Your Business

    It’s hard to predict what the future may bring, so you need to prepare for potential issues. You can protect yourself in unemployment cases by providing detailed employee handbooks for new employees and issuing written warnings that require sign-off from offenders. 

    PEOs, like GMS, can also help businesses reduce unemployment tax risks in a number of ways. Specifically, PEOs:

    • Reduce liability for unemployment taxes

    • Help you write handbooks and job descriptions

    • Consult with you on the employee discipline and termination process

    • Ensure you stay compliant with unemployment laws and regulations

    • Provide representation at claims hearings

    Saving Money While Maintaining Control

    By working with a PEO, like GMS, you can increase cashflow and eliminate liability. And just like with our loss prevention, cost containment, and payroll strategies, you retain full control over your employees while freeing up time for you to focus on growing your business.

    Contact us today to find out how much a PEO can help your business improve its bottom line through unemployment claims management.

  • As far as titles go, I know this one isn’t too catchy. I mean, we all know the taxman’s coming. He always is. What else is new? Nothing yet, but if President Obama’s proposed fiscal year 2016 budget goes through unscathed, a lot may be new according to Thomas and Thorngren.

    Learn how the proposed Fiscal Year budget could affect your unemployment taxes.

    How the Budget Would Affect Your Unemployment Taxes

    As an employer, you’ve been paying unemployment taxes (as have your employees). You’ve been paying 0.6% on the first $7,000 of employees’ income for your federal unemployment taxes (FUTA). Your state unemployment (SUTA) varies from state to state, and is based on different income levels. If the President has his way, there will be a lot more uniformity.

    In 2016, the budget proposes an increase from 0.6% to 0.8%, effectively raising every employer’s FUTA by $14 per employee. Not too big a deal, right? The big deal happens in 2017 when the Federal Government would lower the rate from 0.8% to 0.165%. Sounds great, but here’s the catch: The FUTA taxable wage limit will go from $7,000 per employee per year to $40,000 per employee per year. That calculates to $66 per employee per year or a 57% increase over what you’re currently paying.  

    Here’s the real kicker. The Federal Government will then mandate that every state raise their taxable wage limit to $40,000 per employee per year. Here in Ohio, the current taxable wage limit is $9,000. In fact, all but two states, Hawaii and Washington, would see their limits increase, some very significantly.

    Obviously, most states will adjust their rates accordingly so as not to become too large a burden on businesses, but what that number ends up being is anyone’s guess. Are you prepared for this massive increase? Even if this doesn’t go through, wouldn’t it make sense to get a hold of your unemployment costs now and try to get them to as low a level as possible? If you’re like most small business owners, you’re thinking that unemployment costs are what they are and there’s nothing you can do about it. Like a lot of other business owners, you may be wrong.

    Preparing Your Business with a PEO

    There are ways to control these costs. One is to never lay off or fire anyone. If that’s not probable, you may want to consider working with a Professional Employer Organization. Contact us today to see how partnering with a PEO can benefit you and your business.

  • Whether your business is facing a difficult financial situation or hit a slow season, it may seem like layoffs are your only option. However, there is another way that you can reduce payroll costs without completely cutting jobs: furloughs. 

    Furloughs are a cost-saving measure that can provide employers with financial flexibility without completely severing ties with employees. Of course, you’ll need to ask yourself a few questions to figure out if furloughs make sense for your business. 

    An empty workplace after a business furloughed its employees. 

    What is a Furlough and How is it Different Than Laying Someone Off?

    In short, a furlough is time off without pay. Unlike an employee who is laid off, people who are furloughed are still technically employed by your company. Instead of completely severing ties with employees, furloughs allow you to temporarily part with workers and send them home without pay. Once the furlough is over, the affected employees can return to work and resume their normal duties.

    During this time, furloughed employees cannot do any work on behalf of their employer – even a short phone call or a half-hour of work is considered a violation of the no-work rule. As such, even small tasks can result in you having to pay furloughed employees for their time (or the whole day for exempt workers).

    How Long Do Furloughs Last?

    The length of the furlough can be as short or long as you need. That means that furloughs could range anywhere from a week to several months. Indefinite furloughs are also an option if you’re unsure of how long you’ll need to maintain a lower payroll. If you plan to furlough employees, you’ll want to find a balance between the needs of your business and an amount of time that won’t drive your valued employees to find employment elsewhere.

    How Do Furloughs Affect Hourly vs. Salaried Employees?

    Employers have the right to impose furloughs on both exempt and nonexempt employees, although there are some key differences in terms of cost savings. With hourly employees, you can calculate the total number of hours saved with a furlough and evaluate savings. You can also furlough salaried employees, as these workers are only entitled to pay during weeks in which they work. As such, a long-term furlough won’t change their exemption status. 

    How Do Furloughs Impact Employee Benefits?

    While your employees won’t be paid during a furlough, they are still technically employed by your company. As such, there is some expectation that these employers are entitled to group health coverage, retirement plans, and other such benefits offered by your business. 

    Despite this expectation, you still may have the option to discontinue or reduce the benefits of furloughed employees. However, you’ll want to communicate this with your employees ahead of this decision. Of course, you’ll also need to check your state’s employment laws to see if there are any stipulations about the treatment of employee benefits during furloughs. The Society for Human Resource Management (SHRM) suggests considering the following points:

    • Your group health plan may dictate if coverage continues or ends during a furlough. Certain plans extend active coverage during short-term leaves of absence, while others set minimum hour requirements.
    • You typically must offer affordable COBRA continuation coverage for all group health plans if coverage ends because of termination or a reduction in hours. Also, an increase in the employee’s share of the premium because of the furlough is a loss of coverage for this purpose.
    • Terminating group health plan coverage for furloughed employees may lead to ACA penalties.
    • Covered employees must still pay monthly premiums/contributions to maintain coverage during a furlough. Make arrangements with employees in advance of the furlough to avoid lapses in coverage or invalidated plans. Payment arrangements for allowable coverage should be made in advance with employees and can include payments via mail, ACH, or a COBRA vendor.
    • Evaluate 401(k) and other retirement plan implications. For example, a furlough may trigger a “partial termination” clause, which may lead to 100 percent vesting for affected participants.

    Can Furloughed Employees Get Unemployment?

    While furloughed employees are still technically employed by your company, they will still typically qualify for unemployment benefits. In fact, the CARES Act expanded unemployment benefits for furloughed employees. According to CNBC, these employees are now “eligible to receive their state-administered benefit, based on previous earnings, for up to 39 weeks.”

    Can Furloughed Employees Work Elsewhere?

    Yes, furloughed employees can find alternative employment. In addition, certain states allow furloughed workers to pick up part-time jobs and stay eligible for partial unemployment.

    Determine the Right Path for Your Business

    Furloughs or layoffs are never an easy decision, but it’s important to decide the right route for your business. Need an HR partner to help you plan ahead and stay compliant with local, state, and federal regulations? Contact GMS today to talk to one of our experts about the future of your business.