Compliance

Here’s How to Keep Your Payroll Compliant When Laws Change

Here’s How to Keep Your Payroll Compliant When Laws Change 2560 1707 Alicia East

Keeping on top of the ins and outs of compliance is hard, time-consuming, high-stakes work. It’s worth it to make sure you have an in-house team or a partner dedicated to keeping your payroll services running smoothly and accurately.

Legal Considerations

It’s hard to think of a higher-stakes aspect of business than where the money goes and how it gets there. Your in-house team or partner needs to do the following:

  • Mitigate compliance risks
  • Be aware of practices that could compromise compliance
  • Track benefits eligibility
  • Track changes in minimum wage, overtime, and sick leave policies in each state

Quick And Accurate Payment

Payroll operates at its smoothies when all of the following are in place and functioning well: 

  • Online management: Employees can log hours and supervisors approve them—all online—without the need for actual paper.
  • Payment is fast and accurate: A smoothly-functioning system to track overtime, submit time cards, and obtain supervisors’ approval.
  • Benefits eligibility: There is a process in place to know when employees become eligible for benefits.

The Bottom Line

Everyone is trying to figure out labor laws and fair pay. The gig economy and the worker classification challenges it brings to the forefront are top-of-mind topics for the government, employers, and employees alike.

PayReel knows the biz and the people in the biz. We are ahead of the game with every possible change and are ready to research and take the necessary steps. We stay up to date on payroll regulations and assist clients in navigating the increasingly complicated waters of payroll services.

If you think you might need a partner, rest assured the PayReel team is on top of following all regulations, rules, and federal and state laws. In a nutshell: We stay ahead of the curve so our clients never even have to think about payroll services and compliance.

 

Cyberattacks Are Coming: The Time to Protect Your Business is Now

Cyberattacks Are Coming: The Time to Protect Your Business is Now 2560 1709 Alicia East

President Biden’s warning to businesses was clear: Russian cyberattacks are coming. 

Tensions amid sanctions and Russia’s war in Ukraine are high and Putin’s playbook for countering such measures includes cyberattacks on essential aspects of American life. Consumers will remember last May’s cyberattack on Colonial Pipeline, which cut off nearly 50% of the fuel capacity for the East Coast as well as an attack against Meatpacker JBS from June, which threatened the food supply chain. 

Attacks that target food supply and fuel make the aim clear: the more disruptive to essential aspects of daily life for Americans the better. 

Protect Yourself 

The White House urged companies to take measures to protect themselves from these attacks and have also advised what to do if security measures fail. The list of measures for businesses is extensive, but one measure every single business and individual should take–as basic digital hygiene—is to use multi-factor authentication on all accounts. 

An Ounce of Prevention is Worth a Pound of Cure

PayReel takes cybersecurity very seriously and follows the above guidelines, including running exercises, encrypting data, and educating employees. Any disruption or inconvenience required up front is small in comparison to the havoc a successful attack may cause. The time is now.

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What to Look For When Partnering With an Employer of Record

What to Look For When Partnering With an Employer of Record 2560 1707 Alicia East

Compliance is hard, time-consuming, high-stakes work. Many companies find that keeping on top of the ins and outs with an in-house team gets harder as laws change (and then change again). Whether you partner with a payroll service or build a team to do the job, you want to be sure they’re fully in position to protect you and your company. 

What to Look For In an Employer of Record

1. Ability to Diffuse Legal Landmines 

Contractor/freelancer payment and compliance regulations are ever-changing. Hedging your bets on the legal front means mitigating compliance risks, making sure you are compliant, educating yourself on practices that could compromise you, knowing the state and federal differences in minimum wage and sick leave policies and more. You should also be ready to head off potential vulnerabilities by teaching employees how to appropriately fill out timesheets.

2. Paying Accurately And On Time

This seems obvious, but nothing will tank your credibility faster than having employees come to you over inaccurate or late payment. This is especially difficult if your workers are in multiple states (and therefore, under different legal requirements). If you’re not ahead of tracking benefits eligibility and overtime, you’ll lose trust with employees, which affects employee morale. Services with online management for employees and managers as well as practices in place to prevent unnecessary overtime will help payroll services run like a dream.

3. They’re Ready For Changes

The most effective teams have dedicated people to researches changes as they happen so the company can take the necessary steps. They read forums like a boss and stay up to date on payroll regulations in every state. Navigating the increasingly-complicated waters of payroll services means making sure you’re following all regulations, rules, and federal and state laws. 

The Bottom Line

Labor laws and fair pay standard practices are in a constant state of change. The gig economy and the worker classification challenges it brings to the forefront are top-of-mind topics for the government, employers, and employees alike. Whether it’s your internal team or a partner, pick someone who can stay ahead of the curve so you never even have to think about payroll services and compliance. Life and work is chaotic enough.

As a payroll partner, PayReel makes compliance and payroll the easiest part of your day with a full range of services. We make sure our clients are able to hire who they want, when they want and see that everyone is paid properly. Contact us anytime at 303-526-4900 and meet the PayReel team here!

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Mitigate Workers’ Compensation Risk in Four Steps

Mitigate Workers’ Compensation Risk in Four Steps 2560 1707 Alicia East

Just like any other insurance, workers’ compensation is a “just in case” plan you hope you’ll never need. But if you do need, it’ll save your butt a million ways and you’ll be so glad you have it. Workers’ compensation provides wage replacement and medical benefits to employees injured in the course of employment. Employers that ensure worker safety and implement best practices before they need them are in the best position to protect employees, keep claims manageable, and maybe even keep premiums down. And let’s just get one of the most basic points out of the way: Anyone with employees needs workers’ compensation. Yep, everyone.

Four Steps to Mitigate Workers’ Compensation Risk

Step One: Prevent

Chase prevention like you would chase the crisis or you’ll certainly end up chasing a crisis. Make regular safety meetings, ongoing education, and performance metrics standard procedure. If you don’t have the budget to implement every possible safety measure, you don’t have the budget for the project. The best workers’ comp claim is the one that never happens.

Step Two: Plan

Instead of scrambling to figure out how you’ll handle a claim if it comes up, take steps ahead of time. Make sure reserves are accurate. Have a standard operating procedure. Decide who will talk to the adjuster and within what time frame. Taking the time to lay out your processes while your brain isn’t in crisis mode means you make sounder decisions. The added benefit is that it will reassure your adjuster that you’re engaged and motivated to reach a speedy resolution.

Step Three: Implement 

Implement a return to work program and have a plan for injured workers who have been cleared for modified duty. These measures reassure insurance companies while demonstrating professionalism to employees.

Step Four: Invest

Invest in accurate worker classification. An independent contractor filing a workers’ comp claim can easily land a well-intentioned company on IRS and DOL radar screens. This happens with surprising frequency despite the logical assumption that an independent contractor should understand the implications of a business-to-business relationship. One key aspect of a true B2B relationship is that a worker’s business activity exists independent of the employer. Preventing misclassification and communicating clearly with workers is a worthwhile preventative investment.

What’s Ahead?

COVID-19 has changed workers’ comp in the short term, but its effects will continue to be felt. The issue is ever-evolving in any environment–with or without a pandemic. Analysts anticipate continued changes for the workers’ compensation industry ahead. Workers’ compensation carriers may face declining profits and escalating claims costs and operating expenses. Companies that address the subject proactively will be in the best position to ensure minimal premium increases. Aside from cost, keeping employees safe is forever a worthwhile investment.

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The Hidden Benefit to Paying Contractors in 30 Days

The Hidden Benefit to Paying Contractors in 30 Days 800 534 Alicia East

Internal processes, red tape, and backlogged accounting departments make it hard to get checks in the mail. We definitely understand. Even when a practice is common among other companies, a slow corporate freelance payment policy might prevent you from working with the best people.

Paying Contractors On Time Is Good For Companies

We know that keeping workers happy can be a pain the arse. Still, like many things, a different perspective makes all the difference. Top contractors get booked quickly. When you pay contractors quickly, they’re more likely to answer your calls and ramp up your projects in a short amount of time. For busy department heads with big projects and short turnaround times, there’s nothing better than diving right in with tried and true creative partners. Saving time, money, and hassle by working with people who just get what you’re looking for is priceless.  Paying later than your competition can get you blacklisted or moved to the bottom of a contractor’s long to do list. The true pain is having to go through the entire process of finding someone who is a good fit and bringing them up to speed just because your tried and true contractors have prioritized other companies.

If the benefits to you aren’t enough, think about it from the workers’ perspective. Freelancers single-handedly juggle creative work, billing, marketing, and more. That means the person who sees your invoice in their red column is often the same one you’re expecting to bring their all to your next project. What seems like an insignificant to a big company can have a major effect on a small business’ cash flow.

Don’t Be a Hoarder

Just because many large companies have made it a practice to hoard cash and squeeze small businesses to increase their own bottom lines doesn’t mean you have to follow suit. Not only does it add pressure to those you work with, it’s just not ethical. You may justify it by saying it’s not as bad as the latest headline maker’s illegal and greedy ways, but shady practices of any degree have no place in your business.

The Bottom Line

Paying contractors quickly is worth the investment. If it’s not feasible to transform your internal process, get a partner involved. You get the peace of mind of knowing you’ll always be in good standing with contractors. It pays to hire someone with systems in place.

Hiring contractors is a beautiful thing: It gives you a fresh perspective and talent without having to bring on full-time team members. Just make sure you do it right. Going from Net 90 to Net Now will save you time, keep you in good standing with contractors, and ensure you can feel good about the way you do business. Rather than trying to save Benjamins up front, take Benjamin Franklin’s advice and “Wrong none by doing injuries, or omitting the benefits that are your duty.”

Managing a Contingent Workforce? Here’s Your Audit Prevention Checklist

Managing a Contingent Workforce? Here’s Your Audit Prevention Checklist 150 150 Alicia East

If you work with independent contractors, you know the draw. You get to tap into outside creative resources and outsource work that is not central to your main line of business. It often allows companies to better meet budget.

On the surface, the barometer for identifying independent contractors is easy. They are self-employed and hired to do a specific job. They receive payment only for the work performed. Unlike a regular employee, they pick their projects and regularly move from client to client and business to business. Also referred to as freelancers, consultants and 1099’s, they report their own business income and pay self-employment taxes. Easy enough until you remember that nothing that involves the IRS is ever quite that simple.

 

Is Your IC really an Independent Contractor?

The IRS has very strict guidelines that define true business-to-business relationships. These guidelines are meant to prevent firms from misclassifying would-be employees and thereby avoid, either knowingly or unknowingly, a bounty of state and federal taxes.

This is a deceptively complex question that’s important to answer “yes”, because the risk of your company facing an IRS audit has never been greater.

Best Practices to Prevent an Audit

• Work with contractors who have an established business entity, with a business name and EIN to which invoice payment is made.

• Make sure your contractor provides services to businesses other than your firm.

• Have workers provide certificates of insurance, including coverage for general liability insurance and workers’ comp insurance

• Have a signed per-project agreement for services between your company and the contractor. Each project should have a contract specifying project length, compensation and liability.

• Have workers include expenses such as reimbursements for travel, phone, meals and overtime wages in their day rate.

• An independent contractor’s services should not be integral to the day-to-day functioning of your business. They should not be functioning as a division of your company.

• Watch out for pen-ended, ongoing work. The longer a contractor is with you on a full time basis, the more they take on the role of an employee.

When working with your contractors

• Do not train a contractor, direct their work responsibilities or define their work schedules. Specific instructions on these aspects of a job imply an employee relationship.

• You cannot control any aspect of their work except the results.

• Independent contractors should, when feasible, be using their own equipment. This includes computers and phones.

• Do not provide any employment benefits. Independent contractor’s should have their own health insurance, pay their own employment taxes and not receive any corporate stock options.

• You contract on a per-project basis.

• Above all, keep in mind that this is a business-to-business relationship.

Prevent an Audit

Getting audited can be costly and time-consuming even for businesses that do everything by the book. How much are you willing to pay for employee misclassification? If you have any questions about independent contractor status, trust PayReel to help you make the determination.

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What Do These 3 Things Have In Common?

What Do These 3 Things Have In Common? 2560 1765 Alicia East

1) Fuel Shortages

2) Cryptocurrency

3) Stolen Health Information


To quote the Fiddler on the Roof. “That I can tell you in one word.”

Ransomware.

It’s an ever-growing global threat where the attackers hide behind computer screens and everyone from governments, industries, and individual private citizens is affected. It’s here and it goes way beyond the short-term inconveniences of skipping beef for Father’s Day or waiting in long lines for gas. It’s nothing short of a national security threat.

And as long as it’s profitable to the tune of billions of dollars, it’s not going anywhere.

How Did We Get Here?

According to New York Times reporting, the Facebook model of “move fast and break things” is catching up with us. Companies followed this model to build their systems quickly and beat competitors to the market. And now the age-old lesson that cutting corners ends up being worse for you in the long run? Well, here it is—hitting companies with painful consequences like enormous ransom fees, loss of business operations, compromised data and damaged reputations.

While it’s a very rude awakening, it’s not a new problem. Attackers have been honing their skills and wreaking havoc quietly for years. What started with attacks on individual devices for a few hundred dollars at a time has grown into this current issue that puts billions of dollars on the line and includes national security risks.

What’s new about it is that people are feeling the effects personally.

? How?

Who Is Behind The Attacks?

According to published sources, most of the attackers have one thing in common: They originate in Russia. Attackers write code specifically designed to bypass Russian businesses and the government has given them a free pass. Putin will not prosecute cybercriminals or extradite them upon U.S. request. Experts believe that Putin operates under two unspoken rules:

  1. Don’t attack Russian businesses.
  2. Be ready to do favors for the Russian government upon request. (who? the attackers should be ready to do favors?

What If Companies Don’t Pay?

In 2019, cybercriminals attacked the city of Baltimore and demanded $75,000. Baltimore decided not to pay it and ended up paying $18 million to rebuild the systems instead. The theory is that if all companies refuse to pay, hackers lose their leverage and incentive.

But the bigger the impact, the more leverage the attackers have. When you see hospitals turning away ambulances at the door because they have no way to intake new patients, it becomes really hard to ignore or take the time to rebuild systems altogether. It’s not illegal to pay the attackers and many companies find it much more cost-effective just to pay up.

Hackers, then, are rewarded for their efforts and the cycle continues. The result? Companies spend millions in ransom to get their compromised systems running again, individuals have their personal information compromised regularly and governments are grappling with an issue they’re now ranking as dangerous to national security as terrorism.

&^$#! What Can We Do About it?

On an individual level, it really is as simple and unglamorous as brushing up on cyber hygiene. The Daily podcast cites the saying that, “security is only as good as your weakest link” and it usually ends up that the weakest links are employees and individuals. The Colonial Pipeline attack was traced back to a single employee with a compromised inactive account. What kind of account?

Josh Hornung at Hornung Technology Services, which specializes in IT Support and Cyber Security services said, “A good unique password for each site is step one. Enabling two-factor or multi-factor authentication everywhere you can is step two. Too many people use the same password across many accounts, which is how a lot of this stuff happens nowadays.”

Even the professionals aren’t immune. Hornung knew of an IT professional at a different company who got hacked. He said the attackers “stole a spreadsheet where he kept all of his clients’ logins and security info.” From there, they “started logging into his clients and infecting them with ransomware.”

On a company level, you can either build your systems correctly on the front end and save yourself a world of hurt, or you can fix the problem retroactively and pay dearly for it. And no matter what: the right time to start fixing what’s broken is right now. To quote Hornung, “It’s wild out there!”

How Does PayReel Keep Clients Safe?

With the mountains of personally identifiable information we handle each day, security is hugely important to us. We train our employees regularly on cybersecurity and we pay people to try to infiltrate our systems just to find vulnerabilities. At this point, such penetration tests might be a good idea for most companies—even those that only handle smaller-scale data.

That might not seem very glamorous, but in this case, boring is exactly what you want. If your systems are secure, hackers may be inclined to move along to the low-hanging fruit and leave you alone. Either that or you can become fluent in Russian and start operating all of your business in Russian.  (in Russian or in Russia?)  нет? Okay, well then get on it.

Note: We relied heavily on The Daily’s June 8th podcast episode “Who is Hacking the U.S. Economy?” for this post.

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How to Prevent a Security Breach And Stay Out of The Headlines

How to Prevent a Security Breach And Stay Out of The Headlines 7952 5304 Alicia East
You’ve added two-step verification to everything from your NestCam to your Einstein’s Bagels app. Maybe you’ve even frozen your credit (and your kids’ credit, if you’re super vigilant). You know a breach in your security plan could wreck your life. In business, your access to workers’ Personally Identifiable Information (PII) places an enormous responsibility on your shoulders. They may not think about it every day, but if there’s a breach, they certainly will.

Security is Everything 

Seriously.
When you’re thinking about hiring enough workers to get the job done, the last thing you want to be burdened with is integrating all the systems to make sure you get it done securely. Building the infrastructure to hire and deploy a contingent workforce takes time and serious expertise!
Can you think of many business functions in the world that access more priceless personal information and sensitive company information than hiring? I can’t! The best systems, software, and teams mean little if they are vulnerable to security attacks. You know the only time security makes the news? When it fails.

How Do You Prevent a Security Breach And Stay Out of The News? 

The most secure organizations partner with and employ several internal and third-party resources to protect PPI as fiercely as possible.
At a minimum, we recommend you: 
• Encrypt everything and at multiple levels
• Treat all sensitive information as Personally Identifiable Information (PII) and in accordance with HIPAA recommendations
• Don’t allow any sensitive data to go offshore
• Have third parties perform monthly security checks and an annual penetration test
One of the biggest benefits of working with an Employer of Record (EOR) like PayReel is that we’ve already built the infrastructure to follow all of the above recommendations. We protect clients’ resources, contracts, and data at all times with multi-leveled security systems.
Hey, you can let your PR company keep you in the news for good reasons. At PayReel, we specialize in keeping you out of the headlines you don’t want to be saddled with. Bottom line: You better check yourself before you wreck yourself.
Contact us for a business partner that takes security as seriously as you do.
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What Employer of Record (EOR) Means And How it Can Cover Your Butt (CYB)

What Employer of Record (EOR) Means And How it Can Cover Your Butt (CYB) 2560 1710 Alicia East

Anyone else have a whole folder dedicated to CYB? How about a whole company dedicated to doing that on your behalf? That’s basically what an Employer of Record (EOR) is.

Clients usually come to us with three main CYB dreams for payroll

  1. Keep workers happy with on-time, accurate payroll.
  2. Keep the government happy with accurate worker classification and compliant practices.
  3. Keep our lawyers happy knowing numbers 1 and 2 are happening seamlessly and consistently.

Within those dreams lie many other goals

  1. To be able to hire quickly without changing headcount
  2. To be able to hire freelancers for special projects
  3. To hand off the legal risks of payroll and compliance to someone with the tools to get the job done right
  4. To be able to onboard quickly
  5. To be able to do business in multiple states without having to know all the rules of each of them 

In order to accomplish all of these goals, companies without a highly specialized internal team (nearly everyone except the really big companies) outsources payroll with either an Employer of Record (EOR) or a Professional Employer Organization (PEO). 

What does an EOR do?

An EOR handles payroll and takes on the paperwork and associated legal risks of employing people. It also allows businesses to add workers without changing their headcount. While an employee performs work for your business, the EOR serves as an employer for tax purposes and handles all personnel functions, including payroll processing, taxes, contracts, benefits, employment termination, background checks, worker performance issues, Certificates of Insurance, workers’ compensation, data security, and more. 

What does a PEO do?

A PEO partners with a business as a co-employer to provide HR services and allows a company to outsource some of the HR load. The business still holds all related liabilities and responsibilities and is also still required to carry its own insurance. PEOs are a good option for companies that need to outsource some services without handing off legal liabilities. 

We are in the business of protecting your business. 

Payroll is very complex and is one of the riskiest aspects of doing business as a highly-specialized process of doing payroll in a timely, secure and compliant manner. Payroll is also really easy to mess up. Errors are not just inconvenient and embarrassing, they are sometimes also incredibly costly due to IRS fines and other costs associated with righting a wrong.

Outsourcing payroll means outsourcing risk and makes business sense to most organizations and keeps the company in good standing with the people on the front lines as well as government agencies. 

Ready to CYB with an EOR? Well, here we are

 

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Audits suck: Are your independent contractors putting you at risk?

Audits suck: Are your independent contractors putting you at risk? 830 845 Alicia East

There’s a battle playing out in court over which workers can be classified as independent contractors versus employees. The legal wars demonstrate one important fact for employers: The IRS takes the practice of hiring independent contractors very seriously. That means you should, too.

Independent Contractors (ICs) are self-employed and hired to do a specific job. They receive payment only for the work performed. Unlike a regular employee, they pick their jobs and regularly move from client to client, business to business. Also referred to as freelancers, consultants and 1099’s, they report their own business income and pay self-employment taxes.

Hiring an IC is attractive to those companies looking for outside creative resources, and who want to outsource work that is not central to their main line of business. The work is project-oriented and is typically completed in a short amount of time. It’s also easier on the budget to pay your IC as a vendor, not as an employee.

Sounds nice, right? But there’s a big catch.

The IRS has very strict guidelines that define true business-to-business relationships. These guidelines are meant to prevent firms from misclassifying would-be employees, thereby avoiding a bounty of state and federal taxes.

Is your IC really an independent contractor?

This is a deceptively complex question. It’s important to confidently be able to answer “yes”, because the risk of facing an IRS audit has never been greater.

Best practices when working with an independent contractor:

  • Contractor has an established business entity, with a business name and EIN
  • Your contractor provides services to other businesses outside your firm
  • IC provides certificates of insurance, including at the least coverage for general liability insurance and worker’s comp insurance
  • You have a signed per-project agreement for services between your company and the contractor
  • Independent contractors work for multiple clients
  • Projects have a contract specifying project length, compensation and liability
  • Independent contractor does not function as a division of your company

When working with your contractors:

  • Do not train a contractor, direct their work responsibilities or define their work schedules
  • Independent contractors should use their own equipment
  • Do not provide any employment benefits, such as health insurance and corporate stock options
  • Contract on a per-project basis
  • Keep in mind that this is a business-to-business relationship

Prevent an audit with contractor payroll solutions

Audits are costly and time-consuming even for businesses that do everything by the book. How much are you willing to pay in time and hassle for employee misclassification? If you have any questions about independent contractor status, trust PayReel to help you make the determination.

We screen each employment situation carefully to assess the entire relationship to make sure you are in complete compliance.

Let us save you years of headaches

PayReel and sister company Crew Connection have a 40 combined years of experience helping companies navigate the complex issue of compliance and working with independent contractors. Call us at 303.526.4900 or email info@payreel.com.