HR Insight

Cryptocurrency
HR Insight: Cryptocurrency 940 788 LaDonna Kearney

HR Insight: Cryptocurrency

Can Employers Pay Wages in Cryptocurrency?

Despite the controversy surrounding it, cryptocurrency remains a hot topic. In the employment world, a top question is whether employers can pay employees in cryptocurrency. Before we determine this, let’s explore “cryptocurrency” a bit.

What is cryptocurrency?

Per the Cambridge Dictionary, cryptocurrency is “a digital currency produced by a public network, rather than any government, that uses cryptography to make sure payments are sent and received safely.”

In other words, cryptocurrency is digital money that utilizes encryption to secure transactions. These transactions are done without the involvement of banks and intermediaries via a distributed public ledger called blockchain.

There are many types of cryptocurrencies, with Bitcoin being the first and the most popular to this day. Some experts predict that Bitcoin’s value will eventually reach $100,000, though the possibility of collapse is ever present.

According to Kapersky.com, “Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.”

Among the interested parties are employees. In a 2022 study by Zety, 80% of respondents said they wanted to receive their salary or bonuses in cryptocurrency.

Can cryptocurrency replace a paycheck?

Generally speaking, it is not a recommended practice. Here’s why.

The Fair Labor Standards Act (FLSA) requires “payments of the prescribed wages, including overtime compensation, in cash or negotiable instrument payable at par.”

Note that the FLSA has some exceptions to the negotiable instrument rule. For instance, employers may be able to count food, housing or other facilities as wages. Generally though, employers must use cash or a negotiable instrument payable at par — such as direct deposit or paper check. Moreover, some states require wages to be paid in cash or a negotiable form of U.S. currency.

As explained by Littler, a law firm specializing in labor and employment law, “Cryptocurrency is neither cash nor a negotiable instrument in the United States and is not backed by the government or other legal entity.” As a result, paying base wages or salaries in cryptocurrency is not advised.

The reasoning is that employees should be paid in a manner that allows them to immediately access the payment. This likely won’t happen with cryptocurrency payments. Secondly, many states require wages to be paid free of cost to the employee. Therefore, employees must be able to convert their cryptocurrency payments into U.S. dollars without any fees. However, fees are normally associated with exchanging cryptocurrency to U.S. dollars, selling cryptocurrency or even using a cryptocurrency exchange card.

Some experts argue that employers can simply satisfy the FLSA‘s minimum wage and overtime criteria in U.S. currency and then pay any additional amounts in cryptocurrency. However, employers taking this route must also consider the rules for reporting cryptocurrency payments to the taxation agencies.

Despite any leeway made possible by the FLSA, employers should still proceed with caution, given the various governmental and administrative constraints.

©2023

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Employer Brand
HR Insight: Employer Brand 940 788 LaDonna Kearney

HR Insight: Employer Brand

If You Build It, Employees Will Come.

Who are you, as a company? The overall company brand defines the quintessential qualities of the organization, at large, that is directed to both the general public and all stakeholders, including customers, clients, strategic partners, investors and/or regulators. Employer branding, on the other hand, targets job seekers and employees. It zooms in on the workforce and prospective hires to discover how these groups really perceive your organization.

The employer brand communicates every facet of your employees’ experience, from work/life balance and social values to hiring and onboarding. Buzzword aside, you are looking to figure out your unique employee value proposition. Employers that establish a successful brand own an intangible asset that can be widely parlayed.

The value proposition is a full package

Every organization needs to take a deep dive and examine itself from the inside out. What special differentiating features does your company offer, beyond pay checks of course, making it a rewarding place for an employee to hang his or her hat? Why should a job candidate choose to work for you and not elsewhere?

Your goal is to position yourself as the employer of choice. If that works, you will spark excitement to differentiate yours from more generic brands. In doing so, you will need to address every touchpoint. Some of the main marketing tools for current and potential employees are:

  • Job descriptions.
  • Websites with career pages.
  • Social media profiles.
  • Onboarding materials.
  • Job acceptance and rejection letters.
  • Performance reviews.
  • Internal communications, such as newsletters.

The list is long and can be leveraged to construct a powerful employer brand, which then should be constantly promoted. The human resources department is directly responsible for the brand, but other parties also coordinate efforts to help shape a firm’s identity, including the C-suites, line managers and the marketing department members.

For example, when management approves benefits, it is up to HR to implement them and create marketing tools to promote them. Recruiters should also put the employer’s corporate culture, work environment and reputation into a recognizable brand.

How to build it

The first task for your employer brand is to nail down what your organization stands for both inside and outside the corporation. Sites such as Glassdoor and LinkedIn give a glimpse of outsiders’ perceptions. Conducting surveys among employees and job candidates provides further insights. Also, digging deeper into workshops is useful, since culture is so nuanced and subjective.

Compile a list of leading questions and employment topics to be discussed, such as:

  • What makes us different?
  • Do we offer unique or unusual benefits?
  • Are we treating our current employees well and could we improve?
  • Where should we spread the word about our company?
  • How do people find out about working for us?
  • What channels should we use to promote our brand?
  • Can we measure the results?

Next, it is time to give substance to the ideas and implement an action plan. First among the best practices for successful employer branding is keeping your current employees loyal and satisfied. In today’s social media landscape, negative stories can quickly go viral, undermining hard efforts elsewhere. Other practices for boosting the brand are to:

  • Provide feedback and transparency in interacting with new job candidates.
  • Support some suitable causes, ideally ones associated with your industry.
  • Keep active on social media channels and educate your employees in social media skills — post images of your workspaces and group gatherings, employee videos, testimonials and blogs.
  • Host and participate in public events that can create a positive, enduring impression.
  • Leverage committed employees as brand advocates.

Measure and monitor all these avenues, focusing on areas such as cost per hire and satisfaction surveys.

Employer branding wins

A good brand yields benefits in cost savings and productivity. The war for talent is fierce, so aim to attract and retain the best candidates to avoid turnover. Extra points gained from a solid, credible reputation count, alongside money spent on salaries and benefits, and help level the field with larger organizations. A wider candidate pool means faster hiring times, as well.

Send a clear message where you excel, including:

  • Training and development.
  • Leadership and collaboration.
  • Quality of products or services.
  • Stimulating work and environment.

Certain firms have become known as great places to work, whether for their compensation, opportunities or innovative cultures. This is a club you want to join.

©2023

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Employee Taxes
HR Insight: How to Deal with Employee Taxes 940 788 LaDonna Kearney

HR Insight: How to Deal with Employee Taxes

Employee Taxes – What You Need to Know.

Employers generally must withhold income tax from employees’ wages. To figure out how much employee taxes to withhold, you need to use the employee’s Form W-4, the appropriate method and the appropriate withholding table described in Publication 15-T, Federal Income Tax Withholding Methods. You’ll deposit your withholdings based on your business and the amount you withhold.

File returns four times a year, and at the end of the year, prepare and file Form W-2, Wage and Tax Statement, to report wages, tips and other compensation paid to employees. Each employee needs a copy. You will use Form W-3, Transmittal of Wage and Tax Statements, to transmit Form W-2 to the Social Security Administration.

Know the details

The situation can get complicated when both employee and employer have to contribute. For example, the current tax rate for Social Security is 6.2% for the company and 6.2% for the employee. For Medicare, the current rate is 1.45% for you and 1.45% for the employee. Also, an Additional Medicare Tax applies to an individual’s Medicare wages that exceed a threshold amount based on the taxpayer’s filing status. You’ll withhold an Additional Medicare Tax of 0.9% for single filers who make more than $200,000, and for married couples filing jointly, the threshold is $250,000, but if filing separately, $125,000. You don’t have to match this additional portion.

Employers report and pay Federal Unemployment Tax Act tax separately from federal income tax and Social Security and Medicare taxes. You pay FUTA tax only from your own funds. Employees don’t pay this tax or have it withheld from their pay.

Mark your calendar with key employee tax dates. The IRS has an Employment Tax Due Dates page with information on what you need to do and when you need to do it. The matching share of the Social Security and Medicare payroll taxes is collected as the Federal Insurance Contributions Act taxes, and your part is considered a business expense, not a liability. Because it’s a business expense, it can be written off at tax time.

Don’t forget the states

This is just the beginning of an employer’s responsibilities. You are likely subject to state withholding rules as well. It’s essential that employers be on top of the general rules and any annual rate changes. Understanding these tax issues is important since you bear the responsibility of fulfilling your tax obligations related to your employees. It’s important to send out payments on time to avoid penalties and late fees. Be sure to work closely with financial professionals to make sure you stay compliant.

©2023

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cybersecurity remote employee training
Cybersecurity Training for Your Remote Employees 940 788 LaDonna Kearney

Cybersecurity Training for Your Remote Employees

Having Remote Workers Brings on New Challenges with Cybersecurity. Know the Risks and Offer Cybersecurity Training.

According to a Digital Defense Report published by Microsoft in 2021, the private industry’s support of remote work, in addition to factors introduced by the COVID-19 pandemic, has made remote workers a lot more susceptible to the actions of cybercriminals. Per the 2021 Microsoft report, “While most industries made the shift to remote work due to the pandemic, it created new attack surfaces for cybercriminals to take advantage of, such as home devices being used for business purposes.”

As you can infer, for companies that employ remote workers, it is important to implement training measures that teach them all about various cybersecurity dangers. But what should the training process look like?

Let’s explore some areas of consideration for your training process. These suggestions have been put forth by SANS Security Awareness in its Security Awareness Deployment Guide that covers how to securely work from home. The SANS guide outlines the core cybersecurity risks that remote employees are most likely to face as they work from the comfort of their homes.

Risk No. 1: Social engineering attacks

Social engineering attacks are one of the most dangerous and frequent risks that remote workers face while on the job from home. In essence, social engineering risks refer to situations where remote workers face psychological attacks. In these instances, the social engineering perpetrator tricks remote workers into making mistakes.

The perpetrators do this by taking advantage of vulnerabilities that remote workers deal with during difficult times involving a lot of change. You can think of the COVID-19 pandemic as a prime example of a time when social engineering risks were very prominent.

However, rather than focusing strictly on phishing attacks via email, it is important that employers pay attention to other modes of social engineering attacks, such as via text, over the phone, on social media and through the spread of fake news.

Risk No. 2: Not having strong passwords

A main cause of global data breaches is none other than weak passwords. Though not the only contributing factor, weak passwords put remote workers at risk of having their information stolen or compromised. To counter the likelihood of your remote employees being subjected to data breaches, make sure you train them on the importance of strong passwords and how they can reduce password-related risks.

During the training period, consider addressing the following points:

  • Setting up extra security measures, such as passphrases.
  • Establishing unique passwords for every online account.
  • Utilizing password managers.
  • Enrolling in multifactor or two-factor authentication.

Risk No. 3: Using outdated systems instead of updating them

Something else to keep in mind is that out-of-date technologies are gold mines for cybercriminals who want to target remote workers. To combat this, take measures to ensure that the operating systems, online applications, mobile applications and other forms of technologies that are used by your remote employees are always updated.

Also, remote employees who use their own personal devices for work-related tasks should be advised about the importance of keeping their systems updated too. For example, remote workers can enable automatic updates, which is especially helpful if updating devices is something your remote workers put off or forget to manually do.

3 more cybersecurity topics to cover in training

For starters, you’ll want to let your employees know about the importance of identifying and addressing suspicious online activity. Let your employees know what suspicious activity looks like and how they can report any suspicious activity they see.

From there, let your employees know that if they work remotely outside their own homes, they are still in harm’s way given the public nature of their workplace. As such, make sure they consider the cybersecurity threats associated with their daily work routines.

Finally, inform your remote workers about the importance of keeping their work-related technology private. Relay the fact that they should not let unauthorized persons access their work-related technology, including family and friends.

Make it a point to offer cybersecurity training to all remote employees

Training new remote employees on all things cybersecurity during orientation is always a wise idea. For remote employees who have been with your company for a longer period of time, make sure you provide training periodically so that your long-term remote employees are educated on critical cybersecurity developments as they arise.

To ensure that the training you provide to your employees is accurate, up to date and thorough, consider hosting training sessions that are led by remote-work cybersecurity experts.

©2023

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HR Employment Law FMLA
HR Insight: 30 Years of FMLA 940 788 LaDonna Kearney

HR Insight: 30 Years of FMLA

FMLA Celebrates 30 Years of Providing Employees with Guaranteed Medical Leave. Here’s What You Need to Know.

Ever since it was put into action, the FMLA has made it possible for working Americans to receive a guaranteed 12 weeks of unpaid leave in the event they need to recover from an illness, care for a family member under specific circumstances or stay home with a newborn, all without fearing that they will lose their job as a result. However, keep in mind that employees are usually required to submit a request to take FMLA leave in advance of taking FMLA-related time off.

Which businesses qualify for FMLA-related time off?

Now, the stipulations of the Family Medical Leave Act apply only to businesses that employ more than 50 workers, meaning employees who work at very small businesses often don’t qualify for FMLA leave. If your company meets the size requirement, has employees who have worked within a 75-mile radius and said employees have worked for you for at least 20 workweeks over the course of the current or previous calendar year, then you will be recognized as an employer that can offer FMLA leave.

Requirements of the employees

Any requests made by employees for FMLA leave are expected to be made no fewer than 30 days in advance of the employee’s intended first day of leave. While a 30-day notice is the minimum, employees should notify their employers of their desire to take FMLA leave as soon as possible. After doing so, employees are also required to provide their employer with medical documentation relevant to the FMLA leave request within 15 days of the start of their leave.

Requirements of the employers

On the employer side of things, an employer has to notify the employee who is requesting FMLA leave about the status of their request within five business days. If the employer denies the employee’s request for FMLA leave, the employer must provide the employee with a valid reason as to why their request was not approved.

Employees who take FMLA leave are allowed to use the time all at once or in increments. Whether your FMLA leave is taken consecutively or intermittently will depend on the needs of the employer as well as the specifics of the need for FMLA leave. The FMLA allows employees to take their leave in either 12- or 26-week increments over the course of 12 months, but ultimately it’s up to the employers to decide what they prefer their employees do.

For a lot of employers, the FMLA is preferred to be enacted on a rolling basis to ensure their employees do not take 12 weeks of FMLA leave at the end of December followed by 12 more weeks at the beginning of January. And to clarify, even though FMLA leave is unpaid time that employees take off work, their jobs are protected and the employee will still be employed when the FMLA leave period comes to an end.

For some small businesses, their workforces fluctuate and have fewer than 50 workers at times. So what does this mean in terms of their ability to provide their employees with the option of FMLA leave? Essentially, these businesses still qualify for FMLA leave coverage as long as the business employed at least 50 workers for 20 weeks in either the current or previous year.  

Now, are part-time employees eligible for FMLA leave? Such employees can receive up to 12 weeks’ worth of unpaid leave for both family reasons and medical purposes as long as the employees have worked a minimum of 1,250 hours, though this does not include paid nor unpaid time that was taken in the previous 12 months.

In other words, part-time workers are eligible for FMLA leave if they work approximately 24 hours per week over the course of 52 weeks. Although FMLA leave is unpaid, businesses must maintain the existing group health care benefits that were in place prior to the employees’ FMLA leave. Likewise, employers must restore either the same position or an equivalent role for the employee once their leave is over.

According to Entrepreneur magazine, FMLA leave, like intermittent leave, can be taken in separate and multiple blocks of time. However, there are two main circumstances that must be present if FMLA leave is to be taken: The employee is requesting FMLA leave for a medical reason or to focus on a “serious condition.”

Back in 2009, new regulations were put in place in order to define what a serious condition meant in the context of FMLA leave. Since then, a serious condition is recognized as three consecutive days’ worth of incapacity in addition to two visits to a health care provider. These two visits are required to have taken place within 30 days of the incident that caused the serious condition.

The flip side

While FMLA leave is a highly appreciated option for many working Americans, the law still places workers who cannot afford to take unpaid time off work at a disadvantage. Countless other workers who either do not qualify for FMLA leave or cannot take unpaid leave for economic reasons do not yield many benefits from FMLA leave, if any at all. In fact, according to Fortune, upward of millions of employees refuse to take FMLA leave even if they want to simply because the leave is unpaid.

Please note that there are many states in the U.S. that offer paid family leave programs that allow employees to take time off from work for qualifying reasons. Keep in mind that state-regulated programs such as these are not controlled by the federal government nor are they part of the federal FMLA program.

Look into the options in your state and review the requirements to see whether paid family leave or paid medical leave is an option available to you. As always, protect yourself and ensure your options are in compliance with the FMLA by speaking with a legal adviser. Professionals can assist you in the process of mitigating any legal repercussions that may arise and can also help you understand how the FMLA may apply to your specific situation.

©2023

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mindful meditation HR Insight Wellness Stipends
HR Insight: An Overview of Wellness Stipends 940 788 LaDonna Kearney

HR Insight: An Overview of Wellness Stipends

HR Insight on Wellness Stipends – What You Need to Know.

The importance of health and wellness in the workplace is indisputable. In a 2021 survey, 79% of employees said their employer’s well-being programs helped them become as productive as possible. Additionally, 79% said these programs helped them avoid getting sick. Here is your HR Insight on Wellness Stipends.

Wellness/well-being programs often provide noncash benefits, such as smoking cessation, weight loss, stress management and health screening programs. They can also come in the form of wellness stipends.

A wellness stipend is an allowance given to employees to help pay for eligible physical and mental wellness expenses.

It should not be confused with a health stipend, which covers medical expenses like health insurance premiums and out-of-pocket health care costs.

Wellness stipends are limited to expenses for items that promote general wellness and well-being.

For example, wellness stipends may be used for:

  • Counseling to help employees cope with stress.
  • Weight loss program membership.
  • Ergonomic furniture to support a comfortable office work environment.
  • Gym membership or equipment.
  • Exercise/fitness classes.
  • Yoga classes.
  • Mobile apps for mindfulness/meditation.
  • Nutrition classes.
  • Diabetes education.
  • Chiropractic care.

A real-world example

According to a 2022 HR Dive article, Ernst & Young offers a comprehensive wellness stipend program. Employees can use their stipend to pay for:

  • Home office equipment
  • Fitness classes.
  • Workout equipment.
  • Meal delivery services.
  • Electric bikes and converter kits.
  • Blenders.
  • Juicers.
  • Air fryers.
  • Massages.
  • Tents and camping equipment.
  • Mattresses.
  • Airfare.
  • Hotels and other lodging.
  • Rental cars.

Per HR Dive, “EY has also expanded the fund to include a form of self-care that its chief well-being officer acknowledges as ‘controversial.’ Gaming consoles and chairs, headsets and ear buds, controllers, monitors, and webcams are all eligible for reimbursement by EY.” The same goes for the actual video games.

Of course, not every employer can afford to offer such an extensive list of items. Also, some employers might not see certain items as necessary and will prefer to stick to the essentials.

In the end, the stipend amount depends on what the employer can afford or wants to pay.

According to HR Dive, as of 2022, EY pays a generous 75% of the cost of eligible wellness expenses, up to a maximum stipend amount of $1,000 per year per employee. Other employers can choose to offer a different or smaller amount (e.g., $500 per year per employee) based on their own budgetary constraints.

Wellness stipends are distributed on a monthly, quarterly, semiannual or annual basis. For example, you can choose to offer your employees a $50-per-month wellness stipend.

A wellness stipend program can increase the quality and retention rates of employee talent.

But before offering such a program, try to make sure your employees will actually use the stipends. Keep in mind that wellness stipends are taxable to employees, and this may affect the program’s participation rates.

©2023

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HR insight noncompete agreements
HR Insight: Are Noncompete Agreements Enforceable? 940 788 LaDonna Kearney

HR Insight: Are Noncompete Agreements Enforceable?

HR Insight – Will My Noncompete Agreements Hold Water?

You may want to require employees to sign noncompete agreements to keep them from working for rival companies. Will these protect the business? The answer is … maybe. Over time, courts have become less willing to uphold strict provisions. Indeed, President Biden has issued an executive order for the Federal Trade Commission to examine abusive noncompete agreements. That order will have little direct impact, but it indicates which way the wind is blowing — toward a more employee-friendly approach. Although no current laws have changed, employers are likely to face more scrutiny.

One size does not fit all.

In many states, noncompete agreements are unenforceable. Period. In at least one jurisdiction, the District of Columbia, laws not only ban noncompete agreements but even grant people the right to work simultaneously for multiple employers.

Some states are also distinguishing between higher- and lower-paid staff, acknowledging that it may not be fair to curtail the job opportunities of rank-and-file employees such as those of upper management.

Where noncompetes are permissible, however, similar principles apply:

  • Is it necessary to protect an employer’s legitimate business interest?
  • Does it cause undue hardship for an employee? Courts do not want employees to be utterly blocked from finding new work.
  • Is a public interest involved? Certain industries such as medicine and education are so important that public policy supports them.
  • How long and how far does an agreement extend?

With a variety of industries and firms operating across the board, you must drill down into the provisions regarding each situation. The broader the time span and geographic area at stake, the less likely the agreement is to be enforceable. Reasonable duration and scope may differ greatly from one company to another. It may be excessive to demand national or global restrictions for a local, in-state business. Many noncompetes are typically drafted to remain in force for one or two years — indeed, judges tend to frown on lifelong prohibitions.

The crux is an employer’s legitimate interests. The object is to prevent employees from harming their employers by introducing their best customers to a competitor, sacrificing hard-earned goodwill or disseminating confidential knowledge and trade secrets. The former boss does not want their employees to start their own breakaway company or develop competing products, let alone recruit other former coworkers to a new rival venture.

Consider consideration

Contract law generally requires a quid pro quo to validate an agreement, and noncompetes are no exception. A legitimate contract requires something of value to which the other party is not already entitled.

Although a job offer may be contingent on a prospective employee signing a noncompete, how about those employees you are already employing? If you want them to sign new noncompetes, they need something extra now to count as consideration. That something can take diverse forms, from more money or new job responsibilities to a fancier title or increased benefits such as vacation time. It need not be very valuable, but it must be concrete.

A short checklist for business owners

Watch out for common pitfalls when you are structuring and maintaining your noncompete agreements.

  • Enforce your agreements evenhandedly and without exception across your workforce to avoid any discrimination charges.
  • If you operate in multiple states, be careful about conflicting state laws.
  • As a buyer or seller of a business, be sure to receive noncompetes from the other side for relevant employees.
  • In case your noncompetes eventually get struck down, use confidentiality agreements for additional backup.
  • Include noncompete language in employment contracts to cover fired employees.
  • Tactfully remind any departing employees about any noncompetes they may have signed.

The law of noncompete agreements depends on a host of specific conditions and circumstances. Be sure to consult with industry experts for advice in drafting or interpreting your agreements. Reach out to PeepTek Solutions for further HR Insight: noncompete agreements and other topics.

©2023

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HR Insight - ERC Plans Scam Alert
HR Insight: ERC Plans Scam Alert 640 480 LaDonna Kearney

HR Insight: ERC Plans Scam Alert

HR Insight: Scam Alert -Watch Out for Fake ERC Plans.

You may be aware of widely circulated promotions — ads on radio and the internet — touting refunds involving Employee Retention Credits. The IRS says these are a blatant attempt to con ineligible people to claim the ERC credit. The problem is widespread enough to make the IRS’s annual “Dirty Dozen” list.

The promotions are mostly based on inaccurate information related to eligibility for and computation of the credit. The aggressive marketing by promoters is misleading people and businesses into thinking they can claim these credits. However, there are very specific guidelines around the pandemic-era credits that provided a financial lifeline to millions of businesses.

According to the IRS, when properly claimed, the ERC is a refundable tax credit designed for businesses that continued paying employees while shut down due to the COVID-19 pandemic, or that had a significant decline in gross receipts during the eligibility periods. The credit is not available to individuals.

Nevertheless, there are websites and advertisements touting how easy it is to qualify for the ERC, lending an air of legitimacy to abusive claims for refunds. Tax professionals are reporting that they’re receiving undue pressure from clients to participate and claim the ERC, even when the tax professional believes the client isn’t entitled to the credit.

Limited-time offer only

ERCs were only valid during the pandemic and for a limited group of businesses. As always, you are ultimately responsible for the accuracy of the information on your tax return. Willful filing of false information and fraudulent tax forms can lead to serious civil and criminal penalties.

You should think twice before filing a claim for ERCs — the IRS is actively auditing and conducting criminal investigations related to these false claims. Don’t get caught up in them, IRS commissioners urge — the agency is stepping up ERC enforcement action. The IRS Small Business/Self-Employed division has trained auditors to examine this type of claim and the IRS Criminal Investigation Division is seeking out promoters of these fraudulent claims.

The IRS encourages tax professionals to continue to advise clients not to file ERC claims when the professionals believe the potential applicants don’t qualify. In fact, the agency’s Office of Professional Responsibility sent a special bulletin to accountants outlining core responsibilities for ERC claims.

How the con works

Shady promoters make broad arguments suggesting that all employers are eligible without evaluating an employer’s individual circumstances. Actually, only recovery startup businesses were eligible for the ERC in the fourth quarter of 2021. Third parties don’t inform employers that they can’t claim the ERC on wages that were reported as payroll costs in obtaining Paycheck Protection Program loan forgiveness.

Some ERC advertisements exist solely to collect your personally identifiable information in exchange for false promises. Scammers use the data for identity theft. Protect yourself and your business against ERC scams and identity theft. You are urged to report instances of fraud and IRS-related phishing schemes to the IRS at phishing@irs.gov and to the Treasury Inspector General for Tax Administration, a federal office affording IRS oversight, at 800-366-4484.

©2023

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HR Outsourcing
HR Outsourcing: Know Your Options 1024 577 LaDonna Kearney

HR Outsourcing: Know Your Options

Is This Your Situation: Wondering What Types of Outsourcing Exist

When you choose to outsource HR functions, you must look for companies that fit your business and lean on experts who can implement best practices and policies to boost employee morale and company culture. But you don’t need to make an all-or-nothing decision about whether to keep HR in-house or contract it out. HR covers a variety of personnel issues — many can be performed by staff, while others should get the benefit of HR professionals.

If you plan to outsource your HR, you have three main options:

  • HR Outsourcing.
  • A Personal Employer Organization.
  • An Administrative Services Organization

With an HRO, your employees stay on your business’s books, so you bear legal responsibility for their actions. Instead of managing all or most of your HR functions, HRO provides a selection of services to choose from. You may find an HRO firm that specializes in recruitment and hiring or in employment law — targeted aid in one or more areas where you need help.

With a PEO, you still have control over what your employees are working on and whether they’re promoted or fired. But the PEO bears the full legal and financial weight of your firm’s employment practices as it handles your HR tasks. A PEO uses a co-employment model, which means your employees will appear on the PEO provider’s books for legal and tax purposes. PEOs shoulder a good portion of your business liability.

With an ASO, you get a full suite of HR services, remaining wholly separate and acting more as a partner than a co-employer, working directly with your team. Do you want to maintain more direct authority over your company while obtaining more operational support? Then an ASO may be for you.

That’s the key — what strategy suits your firm? You may want greater organizational support and flexibility but to keep some HR functions in-house, offloading just your software function. Use an HR outsourcing firm to save overhead costs: software as a service outsourcing lets you transfer applicant tracking systems, training and performance tracking, and payroll and benefits management to the third party. You get new updates, features and fixes, as well as security protocols. You can still actively use, manage and champion the software in-house, determining its functional place in your business.

Thinking about your needs

Maybe you envision outsourcing a single HR function to obtain personalized support and service management in addition to a software solution. In this case, you can use business process HR outsourcing to outsource benefits administration to, for example, obtain expert-level knowledge about benefits enrollment and administration.

Perhaps you want a single third-party firm to support your full employee life cycle. With single-source outsourcing, you can hand off talent acquisition, time and labor management, payroll and benefits administration, performance management, and employee separation or termination duties — and maybe even accounting and other business function management. With this strategy, you dictate exactly how involved the HR outsourcing firm should be, and you can keep the big decisions, like hiring and releasing employees, mostly in-house. But what you get is a chance to build a long-term relationship with outsourced HR professionals.

In shared-services outsourcing, HR services such as payroll and benefits administration performed by several employees in different departments are centralized and shared. You can streamline the process via software, effectively lowering costs.

Are you confused? No need to be! We just want to let you know you have plenty of choices based on your preferences, the kind of business you run and your long-term goals. Give us a call and we can discuss the right choices for your situation.

©2023

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Employee Identification Numbers - EIN
HR Insight: How Do Employer ID Numbers (EIN) Work? 1024 577 LaDonna Kearney

HR Insight: How Do Employer ID Numbers (EIN) Work?

If you have a company, you need an Employee Identification Number. There are various ways to apply for an EIN, including online at no cost. The online federal EIN application is in a question-and-answer format, with embedded help topics and hyperlinked keywords and definitions. It must be completed in one session — you won’t be able to save it and return later.

Once all validations are complete, you’ll get your EIN immediately. You can download, save and print your confirmation notice — a fast, free and user-friendly way to get your EIN. Beware of websites that charge for this free service. You can check your state to discover whether you need a state number or charter.

But let’s take a step back. When you apply for an EIN, it is presumed that your business structure is legal, so it’s best to be sure your organization was formed legally before you apply. The clock starts running on the three-year period if you fail to file a required return or notice.

When do you need a new EIN?

If you’re a sole proprietor, you will need a new EIN when there’s a change of ownership or structure, but not for a name change, a change in location, if you add other locations or if you operate multiple businesses. You’re required to obtain a new EIN as a sole proprietor if:

  • You’re subject to bankruptcy proceedings.
  • You incorporate.
  • You take on partners or operate as a partnership.
  • You purchase or inherit an existing business that you operate as a sole proprietorship.

If you incorporate, you’ll need to obtain a new EIN if:

  • Your corporation receives a new charter from the secretary of state.
  • You are or become a subsidiary of a corporation using the parent’s EIN.
  • You change to a partnership or a sole proprietorship.
  • A new corporation is created after a statutory merger.

You won’t need a new EIN as a corporation if:

  • You’re a division of another corporation.
  • The surviving corporation uses the existing EIN after a corporate merger.
  • Your corporation declares bankruptcy.
  • Your corporate name or location changes.
  • You choose to be taxed as an S corporation.
  • You reorganize your corporation and it changes only the identity or place.
  • Your business structure remains unchanged as conversion occurs at a state level.

If your company is a partnership, you’ll need a new EIN if:

  • You incorporate.
  • Your partnership is taken over by one of the partners and is operated as a sole proprietorship.
  • You end an old partnership and begin a new one.

You won’t need a new EIN as a partnership if:

  • Your partnership declares bankruptcy.
  • The partnership name changes.
  • You change the location of the partnership or add locations.
  • A new partnership is formed because of the termination of a partnership under IRC Section 708(b)(1)(B).
  • Fifty percent or more of the ownership of the partnership (measured by interests in capital and profits) changes hands within a 12-month period (terminated partnerships under Reg. 301.6109-1).

And if you’ve lost or misplaced your EIN and want to verify it, you can visit the online EIN site for instructions. You may also ask the IRS to search for your EIN by calling the Business and Specialty Tax Line at 800-829-4933 . The hours of operation are Monday through Friday, 7 a.m. to 7 p.m. local time.

The IRS is limiting EIN issuance to one per responsible party per day. The responsible party is the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets.

When you apply for an EIN with the IRS assistance tool, your nine-digit federal tax ID becomes available immediately upon verification.

Note that this is just a summary; the rules can change over time. Your best bet is to work with a qualified tax adviser.

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