For business owners, payroll staffers and many others, overtime is a major consideration. And within the last year and a couple months, significant changes have taken place to the way employers are able to classify overtime and employees who qualify.

At WTA, Inc., payroll services and related tax areas are some of our most commonly-requested human resource services. The areas we’re discussing here are generally governed by the Fair Labor Standards Act (FLSA), which is run by the Department of Labor. This two-part blog will dig into these standardized bodies and rules, plus the major changes that have recently taken place and how businesses can go about understanding which of their employees do or do not qualify for exemptions.

Fair Labor Standards Act

For many years, salary thresholds that dictate exempt or non-exempt employees have been governed by the FLSA. Essentially, it states that under a certain threshold of weekly earnings in a given position, employees must be considered non-exempt from overtime and paid overtime funds for any hours they work over 40 in a single week.

The major recent change? That weekly threshold, which we’ll discuss in our next section.

2019’s “Final Rule”

In late September of 2019, the Department of Labor under acting US Labor Secretary Pat Pizzella announced an update to the FLSA that’s been termed the “Final Rule” in some circles. This rule took effect to begin the 2020 calendar year and remains so, and states that the threshold number for employee exemption increased from $455 per week ($23,660 per year) to $684 per week ($35,568 per year). Anyone earning under this amount must be considered a non-exempt employee where overtime is concerned.

Exempt vs Non-Exempt Employees

So what does this really mean? Essentially, it refers to the fact that exempt employees cannot be paid overtime even if they work well over 40 hours in a week. These are salaried employees who will receive the same pay weekly regardless of their workload, without any hours tracked – on the flip side, hours are tracked for employees under this level.

Here are the current regulations for the FLSA with regard to exempt and non-exempt employees following the September 2019 changes:

• The above numbers we listed, which are considered “white collar” exemptions, require exemption thresholds to increase significantly.
• Total annual compensation requirement for “highly compensated employees” has moved from $100,000 to $107,432.
• Employers are able to use various incentives and bonus pay, such as commissions, to clear up to 10% of their standard salary level.
• There are also exemptions from overtime pay for people employed as executives, administrative officials, outside sales or certain others, or for specialized industries.

In part two of our series, we’ll go over some specific examples and formats for understanding which of your employees are exempt or non-exempt.

For more on any of our human resource services, from tax and payroll to worker’s compensation and many others, speak to the staff at WTA, Inc. today.

In part one of this two-part blog series, we went over some general tips and themes for HR teams or hiring managers looking to infuse more diversity into their hiring processes. Workplace diversity, which includes areas like ethnicity, gender, socioeconomic status and others, is very important across numerous industries, and has only grown in importance in recent years.

At WTA, Inc., we’re happy to help with a wide variety of human resource services, from employer liability and worker’s compensation to hiring and recruitment areas and many others. What are some of the other steps you can take as an HR staff or hiring manager to increase diversity within your hiring practices? Today’s part two of our series will go over these.

Eliminating Screening Bias

We talked about eliminating pathways to bias in your job sourcing approaches in part one, and similar themes apply to screening – only on perhaps an even larger scale in some situations. There are many forms of subconscious bias that can make their way into the screening process, whether it’s gender-based, ethnicity-based or several others.

For many in HR, unconscious bias training is a specific program to help limit these risks. Other workplaces take very specific steps in terms of how candidates or resumes are labeled, including deleting names, labeling with numbers rather than names, or removing addresses to ensure there’s no bias based on socioeconomic status.

Artificial Intelligence

One modern tool at your disposal for helping limit bias and related areas: Artificial intelligence technology, specifically within your applicant tracking system. These systems are designed to make the hiring process simpler, but they also contain several valuable tools for limiting bias.

Consider the halo effect, a well-known term in HR that refers to a damaging assumption that if someone is good at one thing, they will naturally be good at others. In hiring, this effect can take place on either end of the spectrum based on how much an interviewer likes or dislikes the applicant – AI, however, can interact with applicants while ignoring any subconscious discriminatory factors that may have informed that like or dislike.

No “Tokens”

One of the worst things a business or hiring group can do when narrowing down candidates for a given posting: Include a single “token” minority just for looks. This may be one woman among several men, or perhaps one ethnic minority among several white applicants.

Sadly, research has shown that more often than not, this “token” description proves correct. While a slate of two men and two women as job finalists will lead to about a 50-50 gender split in final hiring, a slate of three men and one woman leads to nearly a 0% chance the single woman will be hired – she will be viewed as “token” and not taken as seriously. Wherever possible, look to balance finalist slates.

For more on increasing diversity in the hiring process, or to learn about any of our HR services, speak to the staff at WTA, Inc. today.

Within numerous areas of business human resources, particularly recruitment and hiring, diversity is a vital theme. Workplace diversity includes varying ethnicities, genders, socioeconomic states and other variables, with research showing repeatedly that diverse teams foster innovation and productivity across numerous industries.

At WTA, Inc., we’ve assisted numerous clients with recruitment and hiring solutions along with our other human resource services, which include payroll, worker’s compensation claims and many other areas. In this two-part blog series, we’ll take a deep look into several of the themes we often recommend to recruiters and hiring managers when it comes to promoting and increasing diversity in the workplace.

Sourcing Processes

The first major step here for many recruiters or hiring managers involves increasing the diversity potential in the pools from which job candidates are drawn. There are several ways to do this, and one of the top methods involves evaluating the language being used in job postings – and the places they’re posted in.

For instance, you want to use welcoming words like “join” or “collaborate” rather than “lead” or other forceful terms. You should also be sure jobs are posted in several different forums, including those you know feature the sorts of candidates you’re looking to attract. Proactivity is never a bad thing here.

Job Requirement Alterations

Most businesses have long been including statements regarding equal employment opportunity in their job postings, often required by law, but it’s important not to stop there. While writing such postings, it’s also vital to think about the requirements and other variables being listed, and how these will impact those who read them.

Take a requirement like years of experience, for instance, which many companies have begun to minimize on job postings for several reasons. One is the way it may impact different groups in varying ways: Research has shown that women are more likely to only apply for a job if they meet 100% of the posted requirements, whereas men will apply more often even if they only meet a majority of the criteria. Leaving out these kinds of arbitrary benchmarks in several areas will help you attract a more diverse range of applicants.

Current Employee Networking

One excellent source of diverse talent for your business will often be current employees. Many of the best hiring managers and recruiters set up easy-to-use employee referral programs that offer incentives to employees who recommend friends, family or others who end up hired.

If you create such a program, or simply canvass employees for suggestions regularly, be sure to emphasize that the company desires employees from a variety of backgrounds and life experiences. Promote diversity here, and the results will speak for themselves.

For more on increasing diversity in recruiting and hiring, or to learn about any of our human resource services, speak to the staff at WTA, Inc. today.

Within the realm of human resources for business, one of the single most important areas is payroll services. And within this broad area, a factor that’s seen some recent changes relates to hourly employees who qualify for overtime, plus exemptions involved in this process for certain employees.

At WTA Inc., we’re proud to provide a wide range of human resource services, including payroll services and several related areas. When you hear a business professional or HR team member talk about exempt versus non-exempt employees, what are they talking about? And how do recent changes from the Department of Labor play a role in this area? Here are some basics to understand.

What Exemption Means

As we noted above, exemptions in this scenario speak to whether a given employee is eligible for overtime payments. Exempt employees are those who are not subject to overtime hours or tracking, usually on a salary, and they must typically meet the following conditions to qualify as exempt:

• Paid at least $35,568 per year, or $684 per week, as of January 1, 2020.
• Paid on a salary basis rather than hourly.
• Performs exempt job duties, generally including high-level areas. Definitions here come down to actual responsibilities and duties, not job titles alone – services may be provided to clients, businesses, corporations or even government agencies. More information on exemptions can be found here.

Non-Exempt Employees

Non-exempt employees, then, are those who are paid by the hour instead of on a salaried basis. In such cases, any employees who work above 40 hours in a given week will have the right to claim overtime and receive time and a half pay for these hours.

Recent FLSA Changes

Everything we’re discussing here is governed by the Department of Labor, or DOL, and as we’ve alluded to previously, there have been some major recent changes in this realm that are worth discussing. Namely, the Fair Labor Standards Act, or FLSA, has been updated as of the beginning of the 2020 calendar year. The FLSA is the document governing overtime pay and exemptions, plus several other important areas. Some of the changes include:

• “White collar” exemptions, which we discussed above, increased from $455 per week to $684 per week.
• Total annual compensation requirement for salaried employees in the “highly compensated” category rose from $100,000 to $107,432.
• Employers now have the ability to use bonuses and incentives (such as commission) to account for up to 10% of a standard salary level for a given employee.

There will also be specific exemptions for workers in certain industries, which has always been the case under the FLSA.

For more on overtime and exemptions, or to learn about any of our worker’s compensation, employer insurance or other HR services, speak to the staff at WTA Inc. today.

In part one of this two-part blog series, we went over some general tips on how businesses and HR teams can manage remote work situations during the COVID-19 outbreak. Many workplaces remain primarily in work-from-home situations, while others may be partially transitioning back to normal.

At WTA, Inc, we’re proud to offer a wide range of HR services, from payroll services to worker’s compensation claims management, employer insurance and numerous others. What are some of the top themes HR pros and business owners should be keeping in mind during these unique remote work periods? Here are a few additional areas to consider.

Responsiveness and Availability

Throughout these periods, it’s important for managers and HR staff to be available despite the lack of physical proximity to many employees. Using communication channels like email, phone and Slack, such individuals should remain directly connected to daily processes and employee needs.

Even in cases where online communications are building up, do not ignore outreach attempts from employees or colleagues. If you need more time, acknowledge receiving the communication and inform the party you haven’t yet had time to handle their request.

Flexibility Where Possible

It’s important to understand that for many employees who are working remotely, this is their first time ever in such a situation. They may not be used to some of the processes that need to be used during this time, or may have challenges with software, online platforms and related technological needs.

It’s vital for managers and HR pros to be flexible and patient during these situations. Anticipate the occasional hiccup and be prepared for them, including preparing solutions for common problems like internet connectivity or others workers at home may experience. Don’t get frustrated or annoyed with those who take a bit longer to adjust than others.

Encourage Collaboration

Collaboration is always important within many workplaces, and this remains the case even when everyone is working from home. Collaborate using tools like Slack and Zoom meetings, allowing employees to continue completing projects in many of the same ways they’re used to. If you involve new software in this effort, remember it will take some employees time to adjust.

Trust Employees

Finally, trust is a central factor in remote working arrangements. Managers and HR staff must strike a careful balance between supervision and overbearing attention – you don’t want to control employees as much as you want to inform them of realistic expectations, then trust them to meet these with light supervision and monitoring. Focus more on output and productivity than the exact amounts of time put in or how long tasks take.

For more on how HR teams and management groups can manage remote work situations, or to learn about any of our HR services, speak to the staff at WTA, Inc today.

During the recent COVID-19 outbreak that’s swept the globe, numerous businesses have transitioned partially or fully to remote work. Telework is not a new theme, one that many companies have taken advantage of for years, but it’s currently being used by many businesses or managers without much experience in this realm.

At WTA, Inc., we offer numerous human resource services for businesses, ranging from risk management to worker’s compensation claims, employer insurance, payroll services and numerous others. In this two-part blog series, we’ll give you the HR professional’s take on remote work situations and how companies should manage them, including some valuable tips to keep workflow high and retain all your business’s original qualities despite this disruption to normal work.

Strong, Consistent Policy

For starters, businesses who moved to remote work within the last couple months should have already established a strong teleworking policy for all employees. This is particularly important for employees who have never worked from home before, but should be reinforced even to those who have.

One major theme to consider here even if you already put a policy in place: It may need to be altered as the months go by – you may, in fact, already be at that point. The first few weeks or months are a great chance to evaluate remote programs and tweak them in simple ways to improve efficiency and satisfaction. In addition, as certain workplaces in some areas of the country are able to return employees to the office, you’ll need a current plan for this re-integration.

Proper Equipment

If you’re asking employees to work remotely during this crisis without their quality level suffering, you need to also provide them with the proper equipment to do so. This can be a challenge for larger offices and workplaces, particularly those who utilize laptops, videoconferencing and related technology often.

For this reason, responsive and high-quality IT teams are vital for larger businesses. These departments will take on a far larger role during remote work periods, assisting employees with their issues without being able to see their hardware.

Schedules and Interaction

It’s important that despite employees working from different locations, general schedules and interactions are maintained. Regular meetings should continue via Zoom or other technology – some companies may even add certain brainstorming sessions or others that might have otherwise been carried out in-person to the average daily schedule.

In addition, management and HR staff should regularly reach out to and stay in communication with employees. This is not only for regular check-ins on productivity and workflow, but also for personal support and answering any questions employees may have about the shifting situation. For more on managing remote work situations from an HR perspective, or to learn about any of our HR services, speak to the staff at WTA, Inc. today.

One unfortunate reality of the COVID-19 outbreak around the country and the world, among many, is the loss of or change in employment for millions. Due to stay-at-home orders that have impacted numerous businesses, many in payroll services and other related areas have had to make difficult choices regarding employee layoffs or other measures.

At WTA, Inc., we’re here to help with numerous HR services during this difficult time, including payroll services and all related areas. You may have heard about a few different types of employment changes or termination formats during this crisis – today’s blog will give a quick primer on what each of these refers to and which you might consider for your business if the situation dictates some belt-tightening.

Layoff

The most direct of the formats we’ll be discussing here is the layoff, which can either be temporary or permanent – most layoffs during this crisis are being labeled temporary, at least for now. Layoffs take place when there is not enough work for a given employee to perform and the company needs to direct those funds elsewhere.

As you can see, this means that in situations where conditions improve, many laid off employees will be rehired. Layoffs are not typically performed due to issues with individual employee performance, for instance. For those who have been laid off due to outbreak-related circumstances, the hope is that when society can safely resume normal activities, most or all of these jobs will rehire them.

Furlough

A furlough, on the other hand, refers to a forced unpaid leave of absence from a company. Practically, it’s very similar to a layoff – there is not enough work and the employee will not be paid during this period. However, there are differences from an official standpoint: Workers are still an employee of the company, and in many cases will retain benefits. Once things return to normal, salary will also resume.

Reduction in Force (RIF)

The most severe of these measures is the reduction in force, or RIF. This is also similar to a layoff, except that in RIF cases, the business removes an entire position or class of positions completely and permanently. There is no intention of ever rehiring anyone for that position in the future, even if economic or other conditions change or return to normal.

Some companies consider voluntary RIF formats, often as early retirement incentives that benefit both parties. This can be helpful for company cost savings, but also benefits the older employee who is nearing retirement age and looking for security. For more on the various employment change formats you might be seeing, or to learn about any of our human resource services, speak to the staff at WTA, Inc. today.

In part 1 of this post we covered two of the most common mistakes that employers make when it comes to payroll: improperly classifying employees as 1099 contract workers (and not withholding or paying the right employee/employer taxes), or withholding the wrong amounts from employees during payroll. In this part we’ll cover some additional mistakes that you don’t want to make as a small business owner when it comes time to process payroll.

3: Bad Records

If payroll isn’t your core competency as a business (like it is for payroll tax services), you might not think much about the importance of having good records in place. But even small mistakes, like mistyping a Social Security number or having errors in employee’s timekeeping records can lead to significant issues with the IRS and with your employees. The most important thing is to have good records so your tax filings are not delayed or flagged for a problem. If the IRS catches one of these issues it can result in large fines or penalties, as well as all the time and money it takes to go through and correct the errors.

Avoid this issue by maintaining accurate records, ensuring proper training for your staff who are onboarding new employees, and consider having a third-party payroll tax company run payroll to help you track and manage all that information with easy-to-use tools.

4: Lost Information

If all of your payroll and timekeeping is digital, you need to have a backup in place in case something goes wrong. If all that information is housed on a single computer, just about anything can cause data loss:

• Human error that overwrites or deletes files
• Computers that crash
• Viruses, malware, or ransomware attacks
• Natural disaster that eliminates servers or physical backups

With limited staff and resources, having your files backed up on the cloud or even with paper copies available is critical to avoid data loss. This can help you avoid the risk of losing critical information you need to process payroll every week or month.

5: Tax Deadlines

If you have poor records and you’re not paying close attention, it can be easy to miss tax filing deadlines for your small business payroll. With the Affordable Care Act there are more reports and information that you have to share, and missing even one payment or filing can cost you a lot.

The easiest way to avoid this issue is having someone with a lot of experience in all the forms and payments. A small business payroll tax service can help with all of this and take the load off your plate.

Small business owners have a lot to think about, and if payroll is something that is hard to keep up with, consider hiring a small business payroll service to avoid these mistakes, which can save you a lot of money and stress.

Payroll is an essential part of every business; unfortunately for many small businesses without experience, the process is also full of pitfalls and risks. Here are some of the most common mistakes businesses make. If you think you might be making these mistakes or you’re not sure how to properly administer payroll, consider the help of a small business payroll tax expert.

1: Improperly Classifying Employees

If you’re confused about how to classify employees in a small business, you’re not alone. Unfortunately it’s also a place where many small businesses fall short, especially for businesses that don’t just have traditional full- or part-time employees.

In 2015, the Department of Labor found that as many as 75% of businesses had misclassified employees; the most common mistake made is to classify an employee as a 1099 contract worker when they should actually be an employee. The former must pay both the employee and employer portion of taxes, while the latter you withhold employee taxes from a paycheck and pay the employer portion.

Independent consultants (1099 contract employees) can offer a lot of flexibility and benefits, but it’s critical that you know the guidelines for when this applies to your employees. Whether you did it intentionally or unintentionally, when the IRS finds the mistake you are going to have to pay all the back taxes for both you and the employee, and will likely get hit with some hefty penalties and interest charges as well.

Avoid this mistake by consulting a payroll tax expert and classify your employees properly. If you’ve already made the mistake, voluntarily reporting it can reduce the penalties.

2: Withholding the Wrong Amounts

The amount of taxes that each person owes is unique to his or her situation and varies based on things like exemptions and number of dependents. It can also change from year to year as the IRS updates the tax code or when Congress passes legislation. As an employer you need to make sure you are withholding the right amount from an employee’s paycheck for income taxes, Social Security and Medicare, and that you are paying employer share for the latter. The most common mistakes people make in the process include:

• Incorrect deductions from employee salaries
• Failing to withhold all applicable state and federal taxes
• Withholding from employees that should be exempt
• Mishandling pre-and post-tax deductions
• Sending out W2s with mistakes

This is a mistake that can also lead to some expensive fines, and may also subject you to government audits in the future.

Check out part 2 on the blog next month for some additional mistakes that you may be making. If you don’t have someone who can keep up to date on all the tax laws and payroll requirements, you can hire a small business payroll consultant to provide you with the expertise to avoid these mistakes.

Ready to process payroll? If you’re like many small business owners, doing another payroll is about as much fun as plucking arm hairs out one by one. In addition to being time-consuming, though, payroll can be confusing and difficult, and doing it wrong can have serious consequences for your business. Since you can’t just choose not to process payroll, here are a few reasons it would be beneficial to outsource it.

1: Time Savings

In 2015 more than half of all small businesses reported spending 3 or more hours a month on payroll (11% report that it takes them 10+ hours every month), a number that has likely increased since that time with changes to payroll taxes and other employment laws. In addition to that time, 58% of businesses reported spending over 40 hours a year on tax preparation. While not all of that is related to payroll taxes, it requires a significant time commitment to prepare all the required quarterly and annual payroll filings. The time increases if you have little or no knowledge of tax laws, and could be taken off your plate entirely if you simply outsource it to a payroll and tax firm.

2: Cost Savings

It might seem like keeping your payroll in-house would save you money, but about one-third of all employers make some type of payroll reporting error, according to the IRS, which costs companies billions of dollars annually in fines and fees. That alone should be enough to make small business owners seriously consider the benefits of paying someone else to do payroll (and get it right).

Other costs that an outsourced payroll agency can help with are time spent calculating payroll, signing and distributing paper checks, generating reports, reviewing and auditing timecards to avoid errors in things like paid time off, and paying the appropriate taxes.

3: Avoiding Legal Headaches

One of the most common errors in payroll is the misclassification of employees—for example, classifying someone as a 1099 contract employee (withholding no taxes) instead of a full employee (withholding and paying all taxes). Classification rules can be confusing, so having someone look objectively at your employee pool to determine classifications can save you a lot of headache down the road.

Another potential legal issue many small businesses run into is changes in tax withholding amounts. The tax laws have changed significantly in the last two years, so you may not be withholding the right amount from your employees’ paychecks, which could cost them and you at the end of the year. In fact, around 1.8 million small business tax returns (those with income from $200,000 to $1 million) were audited in 2016, and over half—978,564—were assessed some type of civil penalty.

Don’t spend any more time worrying if you messed up on payroll or filed the right forms with the IRS. Outsource your payroll to WTA, Inc. today and let our experienced team help.