Archive for May, 2012

PCS Timekeeping Products Create Efficiency

Thursday, May 31st, 2012

TimekeepingToday’s automated timekeeping technology is a powerful resource for businesses, both large and small. It is designed to offer exceptional convenience, and to substantially improve profit margins by reducing the cost of labor.

Our integrated timekeeping packages offer solutions for all types of businesses. Whether you make use of the traditional badge swipe, utilize the new biometric (fingerprint or hand punch) clocks, or your employees clock in from their PC, you can enjoy a solution, or network of solutions, that make managing your labor efficient.

Staying competitive in business today requires companies to find new, controllable ways to drive revenues and profitability. On that note, many companies today do not realize that they can significantly reduce the cost of one of their greatest expenses, employee labor, thus increasing company profitability.

The American Payroll Association (APA) has declared numerous ways in which companies are hurting their profitability by not implementing today’s automated timekeeping technology. Take a look, and evaluate where your company could save:

Cost 1:  Human Error

The APA estimates that the rate of human error in time card preparation and totaling is between 1% and 8%. Therefore, a conservative 2% error rate on a $12,000 payroll would equal $240 in erroneous wages.

Cost 2:  Wasted Labor Minutes

Did you know that just 15 employees receiving pay for merely 4 minutes of “wasted” time per day (untracked breaks, extended lunches, over-approximated punch times, etc.) will total 1380 minutes (23 hours) of additional pay per month?

Cost 3:  Manual Time Card Totaling

The average payroll clerk spends 7 minutes per time card each pay period:

  • Preparing and handling time cards
  • Computing time card totals
  • Verifying time card totals
  • Computing shift and department totals
  • Reconstructing lost or damaged time cards

The Cost: Preparing 100 time cards will take an estimated 11.67 hours to complete.  Therefore, at an average clerical wage of $15.00 per hour, time card preparation would cost $175.05 per pay period.

Today’s automated timekeeping technology is a valuable resource as it is able to eliminate these costs, and save you significant amounts of time.

For more information on PCS Timekeeping products and services, click here.

Submitted By:

Christopher Flynn, MBA
Timekeeping Services Manager
Payroll Control Systems
763.746.1923 Direct
Email Chris

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

New Tax Credits and Tax Relief Available

Wednesday, May 30th, 2012

Tax CreditsUpdated 5/30/2012.

IR-2012-56, May 23, 2012

WASHINGTON — The Internal Revenue Service is marking Small Business Week, May 20 to 26, by encouraging small business owners to check out two key tax credits and a special relief program that could provide significant tax benefits during 2012.

Both the expanded credit for hiring veterans and the credit for employer-provided health care coverage can provide tax savings to eligible small businesses when they file their 2012 federal income tax returns. In addition, substantial relief from past payroll tax obligations is available to eligible employers who agree to reclassify their workers as employees in the future. Here are details on each of these benefits.

Expanded Tax Credit for Hiring Veterans

A law change enacted late last year now provides an expanded Work Opportunity Tax Credit (WOTC) to employers that hire eligible unemployed veterans. The credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 for tax-exempt organizations. The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, hours a veteran works and the amount of first-year wages paid. Employers who hire veterans with service-related disabilities may be eligible for the maximum credit.

Certification requirements apply to these new hires. Normally, an eligible employer must file Form 8850 with the state workforce agency within 28 days after the eligible worker begins work. But under a special rule, employers have until June 19, 2012, to complete and file this form for veterans hired on or after Nov. 22, 2011, and before May 22, 2012. The 28-day rule will again apply to eligible veterans hired on or after May 22. This form can be faxed or electronically transmitted to the state workforce agency, as long as the agency is able to receive the certification forms that way.

Businesses claim the credit on their income tax return using Form 5884 and Form 3800. A separate claim procedure using Form 5884-C applies to eligible tax-exempt organizations. Details are on IRS.gov.

Credit Helps Small Employers Provide Health Care Coverage

Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for the small business health care tax credit. Enacted two years ago, the credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.

Eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014. Targeted to small employers that primarily employ low-and moderate-income workers, the maximum credit, in tax-years 2010 through 2013, is 35 percent of premiums paid by small businesses and 25 percent of premiums paid by tax-exempt organizations, increasing to 50 percent and 35 percent, respectively, in 2014.

Small businesses claim the credit on their income tax return using Form 8941 and Form 3800. Tax-exempt organizations also use Form 8941 and then claim the credit on Form 990-T.

The recently-revamped Small Business Health Care Tax Credit page on IRS.gov is packed with information and resources designed to help small employers see if they qualify for the credit and then figure it correctly. These include a step-by-step guide for determining eligibility, examples of typical tax savings under various scenarios, answers to frequently-asked questions, a YouTube video and a webinar.

Many Businesses can qualify for Substantial Payroll Tax Relief

Many businesses can now resolve past worker classification issues at a low cost by voluntarily reclassifying their workers. Better yet, they don’t have to wait for an IRS audit to do so.

By prospectively reclassifying workers, making a minimal payment and meeting a few other requirements, eligible businesses can achieve greater certainty for themselves, their workers and the government. Already, 540 employers have been approved to participate in the new IRS Voluntary Classification Settlement Program (VCSP) since it was launched last September.

The VCSP is available to many businesses, tax-exempt organizations and government entities that erroneously treat their workers or a class or group of workers as non-employees or independent contractors, and now want to correctly treat these workers as employees in the future. To be eligible, an employer must:

  • Consistently have treated the workers in the past as non-employees,
  • Have filed all required Forms 1099 for the workers for the previous three years
  • Not currently be under audit by the IRS
  • Not currently be under audit by the Department of Labor or a state agency concerning the classification of these workers

Interested employers can apply for the program by filing Form 8952. Employers accepted into the program will pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. It’s that simple. Moreover, employers will not be audited on payroll taxes related to these workers for prior years. Further details are available on the Employment Tax pages of IRS.gov, and in Announcement 2011-64.

Details on these and other tax benefits are on IRS.gov. In addition, the Small Business Tax Center (www.irs.gov/smallbiz) has links to a variety of useful tax tools for small business, including the Virtual Small Business Tax Workshop, a downloadable tax calendar, common forms and their instructions and help on everything from how to get an Employer Identification Number (EIN) online to how to engage with the IRS in the event of an audit.

PCS has partnered with TaxBreak, LLC to provide assistance with tax credits.  For more information, visit our website or contact us.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

How Can I Get Employees to Save for Retirement?

Wednesday, May 30th, 2012

401K Retirement Savingsby Jennifer Arntson
Tax Sheltered Compensation, Inc.

The most fulfilling part of my job as a Client Relations Manager at TSC is meeting with our clients and their advisors to review their company’s retirement plan.  Lucky for me, 50% of my time is spent doing just that.  In these meetings, I hear many of the same questions and concerns from business owners.  One of the most common questions that I hear is: “How do I get my employees to participate in the plan and appreciate the value of this benefit I am providing?”  This is where automatic enrollment in conjunction with a good education plan can really make a difference.

When the topic of auto enrollment is discussed, there are certain questions that inevitably come up. Does it work?  What if an employee wants to opt out?  Will my employees get upset with me for defaulting them into the plan?  Will I have to play “baby-sitter” with my employees’ retirement savings?  Based on my experience implementing auto enrollment for our clients, here are my answers to these questions:

Does it work?  Yes, it does, and not only for large companies (a common misconception).  Employees that don’t opt into the plan usually don’t opt out – all due to inertia.  This employee behavior has shown to be consistent regardless of the size of the company they are employed by.

What if an employee wants to opt out?  They can do so at any time by completing an enrollment or contribution change form.  In addition, many employers choose to allow an employee to remove the contribution made within the first 90 days of the automatic enrollment.

Will my employees get upset with me for defaulting them into the plan?  While the answer is generally no, I did have a client share an experience with me that I found very interesting.  An employee was defaulted into the plan at a rate of 3%.  The employee was going to opt out of the plan and ask for a refund of the first contribution made; however, upon reviewing the amount deducted and placed into the plan, she decided the amount did not have a significant impact on her take home pay.  Furthermore, she realized that if it weren’t automatically deducted she would never have made the election to contribute for herself and decided to continue to defer into the plan.

Will I have to play “baby-sitter” with my employees’ retirement savings?  You do not need to play baby-sitter if you adopt the auto enrollment provision.  You will need to make sure employees are aware of the provision and distribute the appropriate employee notice and enrollment forms.  From then on it works just as if they had made a positive election into the plan.

You may have asked yourself many of the same questions as above.  Based on what you have read, could your 401(k) plan benefit from auto enrollment?

TSC is a Certified Payroll Control Systems partner.  For more information, visit the TSC Website by clicking here.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

How to Fire an Employee and Stay Within the Law

Wednesday, May 30th, 2012

by Caron Beesley, SBA.govFiring An Employee

Several blog posts on SBA.gov offer plenty of advice on how to hire, mentor, and motivate employees. We also frequently tackle the issue of dealing with difficult or disruptive employees. But what happens when you find yourself at the end of the road with no choice but to terminate an employee?

What steps must you take? What does the law require? What are the employee’s rights? What should you do about employee benefits and continuing health care coverage?

Doing everything right won’t always protect you from a lawsuit, but it will show that the termination was justified, legitimate, and handled within the law.

This blog post explains six essential things you need to know about firing employees within the law:

1. Understand the Employment at Will Policy

Every state (except Montana) gives employers the option of adopting an “at-will” employment policy, meaning that an employer may terminate any employee at any time, for any reason, or for no reason at all. Sometimes employee agreements or contracts contradict the “at-will” policy, so check the wording to make sure where you stand.

2. Know When it’s Illegal to Fire an Employee

Your power to fire is not unlimited. Here are some things you can’t fire someone for:

  • Discrimination – Federal anti-discrimination law prevents employers from firing employees based on age, race, gender, religion or disability.
  • Whistleblowers – You can’t fire employees for complaining about any illegal activity, health and safety violations, or discrimination or harassment in the workplace. These statutes and laws vary by state, so check with a lawyer if, for example, you wish to fire someone who has complained or testified against you in court.
  • Exercising Legal Rights – You can’t fire employees for taking family or medical leave, military leave, time off to vote or serve on a jury.

3.       Be Sure to Document Performance Issues

Despite the “at-will” policy, you should document instances of poor performance and tardiness, and maintain good records of employee performance reviews and any previous disciplinary interventions. This will provide legitimacy to your actions and prevent any complaints, lawsuits or accusations that termination was discriminatory. Protect yourself by retaining these records, even after the employee has left, and have a cheat sheet of documented performance lapses on hand to refer to during the termination meeting.

4.  Understand Employee Rights – Benefits, Unemployment Insurance, 401ks

What benefits are your employees legally entitled to if they are fired or terminated? Here are the main benefits that employees may be entitled to if they are fired:

  • Continuation of Health Insurance CoverageCOBRA is a federal law that applies to employers with more than 20 employees. If these employers administer a group health plan, they are required to offer terminated employees, their spouses and dependents the option of temporary continuation of health coverage at group rates. If you have fewer than 20 employees, check with your state; some have comparable laws for smaller employers. Another caveat of COBRA is that terminated employees may be excluded from the plan if they were fired for “gross misconduct.” The law, however, doesn’t describe what is meant by “gross misconduct,” leaving it open to interpretation. This blog offers guidance on this matter: COBRA: What is “Gross Misconduct.”  As an employer, you can require individuals to pay the full cost of coverage, which can be significantly higher than group premiums.
  • How to Enroll Fired Employees in COBRA – You’ll need to notify your group health plan administrator within 30 days of firing or terminating your employee to kick start the COBRA process. You may even want to call in an outside HR firm to help you save time and confusion in the long term. SBA.gov also provides COBRA FAQs and more information here (scroll down).
  • Unemployment Insurance – It is your legal obligation to notify fired employees of their possible eligibility for unemployment insurance. By knowing their rights, employees are more likely to file a timely claim (and you can avoid being sued).
  • Vested Retirement Plans – Fired employees must remain eligible to receive vested 401(k), profit-sharing or pension benefits.

5.  The Final Paycheck

Employers are not required by federal law to immediately give former employees their final paycheck. Some states, however, may require immediate payment, and are specific about what should be included in the final paycheck, such as accrued or unused vacation days. Contact your State Labor Office for information on employer requirements in your state. The Department of Labor also provides a Last Paycheck guide that explains applicable laws and regulations.

6. What About Severance Pay?

There is no requirement in the Fair Labor Standards Act that you provide severance pay. This is a matter of agreement between an employer and an employee. Read more from SBA.gov on how to handle severance pay.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

Training on Reports and Report Writer

Wednesday, May 30th, 2012

ReportsIn past newsletters, we’ve highlighted some of the standard reports available in Pay Entry and Millennium 3.

The Standard reports, along with our system’s Report Writer tool, offer many options for reporting capabilities. If you’re interested in further exploring the Reports module, or have a desire to learn the process of creating your own reports in Report Writer, you may request training on either or both of these reporting functions.

We do offer monthly introductory classes on Reports and Report Writer. These are held in the PCS training room. Space is limited and classes tend to fill quickly. If you are interested, please contact Pam Clifford at 763-746-1936 or email by clicking here to check on class availability and get registered! If preferred, training options outside of the monthly classes are also available.

Free Seminars Hosted By Venture Bank

Friday, May 11th, 2012

Venture Bank LogoMay 20 – 26, 2012 is National Small Business Week.  Venture Bank is proud to be a supporter of small businesses in the Twin Cities, and in celebration will be hosting a series of free seminars on important business topics.  Sign-up for one or all!

Register for these free seminars here:
http://www.venturebankonline.com/smb2012

Breaking Into Exporting – May 9, 2012

Featuring: Matt Woodlee of the US Department of Commerce and
Carlos Sosa of the US Small Business Administration

With the federal government having embarked on the National Export Initiative with the goal to double exports by the end of 2014, there are vast amounts of resources and opportunities for businesses to expand internationally… Learn More

Legal Implications of Social Media – May 17, 2012

Featuring: Erin Swanson of Swanson Law

Do you currently use, or have you considered using social media such as Facebook, Twitter and LinkedIn for your business? With the big buzz around social media, it’s important to be aware of the legal issues that exist for businesses when using social media to market their companies and screen potential job applicants.
Learn More

 

Consultant Panel – May 22, 2012

Featuring: Nathan Austin of MyTech Partners,
Rochelle Shirk of Savvy Planning,
Patrick Strother of Strother Communications, and
Ben Marks of Marks Group

Are you considering hiring a consultant to assist with some aspect of your business? How do you know that you really need that consultant? And, what does hiring them really entail? Many businesses find themselves asking these same questions. Learn More 

 

Succession Planning – May 30, 2012

Featuring: Al Boyden of Boyden Consulting and
Jon Schindel of Seiler & Schindel PLLC

Succession planning and emergency preparedness planning is imperative for business owners. Many businesses fail because they were forced to be reactive to a sudden disaster, so it is important to be proactive and have plans in place for all business risks. Learn More 

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.