HR Salaries Are On The Rise

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Here’s some great news for HR professionals: HR Salaries are on the rise!

While HR professionals’ salaries depend heavily on their employers and locations, as well as their education and certifications, we’re seeing an overall increase within the industry for the second year in a row. Average base pay will increase 3 percent in 2014 according to the seventh annual Compensation Planning Survey by Buck Consultants.

Numbers vary though. Earlier in the year (June of 2013) we shared a blog titled “How Much Does a New HR Manager Cost?” Salary.com stated that the median expected salary for a typical Human Resources Manager in the United States was $88,408. That number is now $88,960 – a smaller increase than what’s predicted in the Compensation Planning Survey, but an increase nonetheless.

If you’re an employer you may be trying to justify the expense of a fulltime HR professional, or an internal HR department. Not every small to medium sized business has the resources to support their own group of HR professionals at $80,000+/year, especially since these positions fall outside of the company’s core competences.

Even large companies may not be able to justify hiring an internal HR team; the amount of employee management necessary within the workplace may be tremendous, requiring a number of professionals to manage payroll, HR, administration, benefits and more.

If you’re currently indecisive about whether to outsource HR help or recruit an internal team, we encourage you to contact Employer Solutions Plus. Our team is skilled at designing cost-effective packages for accomplishing everything you need surrounding employee management. You don’t necessarily need to choose an internal or external department – you could utilize a little bit of both and only hire vendors within a specific area such as benefits or payroll. Each company’s situation is unique and requires a unique solution.

Click here to contact our team.

 

Are Employee Handbooks Necessary for Small Businesses?

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Have you ever worked at a large company? On your first day you probably received a large stack of important company information, documents, policies and more – maybe even in the form of an employee handbook.

Employee handbooks are usually provided by employers and contain employment and job-related information that employees need to know such as recognized holidays (days off), company rules, grievance procedures, important resources and contacts, policies, and more. But is all of this information really necessary at a small business?

Employee handbooks are extremely important for small businesses and large businesses alike. Here are just a few reasons why:

Handbooks Protect Employers: Handbooks provide clear expectations to employees and create a culture where issues are dealt with fairly and consistently. If an employee has a dispute, but has previously received and signed a handbook that clearly stated the policy, the company will often be protected from a liability standpoint. For small businesses especially, a claim against the business can completely destroy your cash flow – it’s much better to be safe than sorry!

Handbooks Save HR Professionals Time: You may not have an HR professional on staff – perhaps the office manager or even you, the business owner, is in charge of managing the employees. When there’s a handbook to conveniently outline paid time off, holidays, vacation time, etc., you don’t need to explain (or email) the same information over and over again each time an employee inquires. Remind them to refer to their handbook!

While the employee handbook’s main purpose is to establish a convenient and clear line of communication, don’t forget the following disclaimers: the handbook can be updated at any time and it is not an actual contract. Employee handbooks should be reviewed and revised each year at a minimum, or whenever the company undergoes significant changes.

Do you work with a Professional Employer Organization (PEO) or an Administrative Services Organization (ASO)? If so, be sure to ask them if their services include complimentary employee handbook creation and updating. If they do not, or you don’t currently work with a PEO/ASO, contact Employer Solutions Plus for additional information and support: 727-698-6207.

What Will My Employees Think of a PEO?

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The word “co-employment” occasionally scares business owners. Will I be giving up control of my own workplace? Will points of contact and communication methods change? What will my employees think of a PEO “stepping in”?

These are common concerns and as a business owner you certainly have the right to be concerned! While the term “co-employment” may sound a bit scary, let’s review a few things first!

You do not lose control over your business in a co-employment relationship. You will retain ownership of the company and control over its day to day operations.
On paper, as co-employers, you contractually share or allocate employer responsibilities and liabilities. The PEO will likely take responsibility for administration, payroll, taxes and benefits. Because a PEO may also be responsible for workers compensation insurance, they may want to focus on improving worksite safety and ensuring your company is continually in compliance.

We always recommend strong communication with employees at the beginning of a new PEO/co-employment relationship. It’s not a difficult transition for anyone within the workplace, but clear communication always promotes a positive working environment.

Many employees would never realize there was actually a PEO operating behind the scenes if it wasn’t for their paycheck. Because PEOs take over payroll responsibilities, the checks your employees receive will likely have the PEO’s name on it.

The only other change they will notice is the number of advantages they now have because your company is associated with a PEO. These advantages include: streamlined payroll and claims processing, robust benefits, better communication and even improved job satisfaction through clear expectations, easy-to-read employee handbooks, and the fact that they’ve got experienced professionals on their side to handle employment-related issues.

If all fears are finally aside and you’re now ready to make the switch to a PEO, call Employer Solutions Plus at 727-698-6207. We can also answer any additional questions or concerns that you may have!

How Much Does A New HR Manager Cost?

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Outsource….hire….no, outsource ….no, hire. Business owners struggle with this dilemma nearly every day of their working lives!

If you’re to the point where HR tasks are piling up, higher than the eye can see, you’re probably ready to bring on an HR Manager…someone you can offload these non-revenue generating activities to. But wait a minute, how much does an HR Manager actually cost?

Salary.com states that the median expected salary for a typical Human Resources Manager in the United States is $88,408. Glassdoor.com puts that number at around $80,000. Either way, it is important to note that many factors directly affect an HR Manager’s responsibilities and workload – therefore affecting what the appropriate salary at your organization will be. How many employees will the HR Manager oversee? Will they work on their own or will they work alongside another employee such as the office manager? What type of education or training will be necessary to adequately serve your business?

Here’s something to consider: While bringing on an HR Manager will keep things in-house and certainly decrease the amount of time you personally waste each day on tasks that do not generate revenue, you are probably STILL going to need to outsource certain aspects of your business that fall under “HR” including payroll, benefits, and workers compensation.

An HR Manager will absolutely assist your business, but will he or she cost more than what their services are worth? Don’t forget that fulltime employees typically come with the added expense of employee benefits.

Most large companies that are in “employee management overload” will argue yes, an HR Manager is absolutely necessary and the cost of hiring is justifiable; management can generate a lot more sales (totaling more than that HR Manager’s salary) if they themselves aren’t focusing on non-revenue generating tasks. But, for the small to medium sized business owner, the expense of hiring fulltime, knowing that you’ll still need to outsource various aspects of HR, is quite daunting. Many choose to stay put in their frustrations, wearing their HR hat along with many other hats.

Are you that person? Wearing too many hats but not in a position to hire? If so, have you ever considered a PEO? Through the co-employment relationship a PEO will become the legal employer of your staff and handle all the payroll, benefits and HR functions. Outsourcing, well yes, but it’s all through one convenient relationship!

Like all professional services, PEO prices vary depending on the company. But, in most instances, a PEO relationship will cost you less than a fulltime HR Manager, and, you won’t have to deal with the headache of managing multiple vendors anymore. All of your HR functions are under one roof. PEO prices range between 2 and 10 percent of wages. For very small companies (less than 5 employees) some PEOs may charge a flat fee per month.

What option is best for you? You won’t know until you’ve got a side by side comparison based on your wants, needs, and budget! Contact Employer Solutions Plus if you’re interested in learning more about the PEO relationship and its costs!

Transitioning from 1099 to Employee – Employer Checklist

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Do you have a worker that has been a 1099 to date but it’s now time to classify them as a W2 employee? In an ideal world, this would happen right around the end of the year so that the switch could be made on the 1st of the year, simplifying your business’s and employee’s taxes.

But, sometimes the switch needs to occur prior to that; misclassification is punishable by tax penalties so it is not recommended that you delay the transition to W2 employment if it is in fact necessary.

The misclassification of employees as independent contractors presents a serious problem for affected employees,employers, and the entire economy. The Department of Labor has countless initiatives in place to identify misclassifications and get workers the benefits they are entitled to such as family and medical leave, overtime, minimum wage and unemployment insurance.

When you employ a 1099 worker, the only forms necessary for the worker to complete each year is a W9, which is a request for the taxpayer identification number and certification. The worker is responsible for paying their own taxes as an independent contractor.

When the worker becomes an employee, much more responsibility falls on you as the employer. Below is a “hiring” checklist for transitioning into a W2 position. We strongly recommend consulting with a professional such as Employer Solutions Plus that can assist you in any of the areas below; each has its own complexities. Essentially, switching a 1099 worker to a W-2 employee should be handled just like a new hire would be.

  • Form W-4 for Federal Income Tax Withholding
  • State Income Tax Withholding Form
  • Form I-9
  • E-Verify (Even if your worker has already worked with you as a 1099, E-Verify is very important. It confirms the eligibility of the employee to work in the U.S.)
  • Register with State Employment Notification System
  • Review and Issue Employee Handbook (This helps ensure compliance)
  • Enroll in Benefits

It is also recommended that you consider the assistance of a payroll service provider if you are not using one already. A payroll service provider will handle all of the above-mentioned forms and verification processes for you, and help streamline your payroll each month.

For more information on hiring or transitioning an employee from 1099 to W2, contact our team.

Who is Eligible for FMLA leave?

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Background: FMLA (Family and Medical Leave Act) is enforced by the US Department of Labor. This act was established to help employees better balance their work and family responsibilities. It provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. FMLA also requires that the person’s health benefits be maintained the entire time of their leave.

Does FMLA apply to your company? FMLA only applies to companies with 50 or more employees, as well as all public and private elementary and secondary schools, and public agencies. If you are classified as one of the aforementioned, read on!

Only employees that have worked for their employer at least 12 months, or at least 1250 hours over the past 12 months are eligible for FMLA. As an employer, this is just one of the many reasons it’s important to have accurate payroll and employee data. An eligible employee must also work at a location where the company employs 50 or more employees within 75 miles.

Employees requesting to leave work for the following reasons are covered under FMLA. Employers must provide 12 weeks of unpaid, job-protected leave (and a continuation of benefits) to those leaving:

  • for the birth and care of the newborn child of an employee
  • for placement with the employee of a child for adoption or foster care
  • to care for an immediate family member (spouse, child, or parent) with a serious health condition
  • to take medical leave when the employee is unable to work because of a serious health condition

*Source: US Department of Labor

Did you know that in addition to Professional Employer Organization options, Employer Solutions Plus offers human resource management services for FMLA, ERISA, COBRA, HIPPA, ADA and more?

If you’re having trouble sorting through countless compliance issues, employment laws, and regulations, or have a specific question regarding FMLA, please contact us.

Is Your Workforce Properly Classified (IC or Employee?)

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Do you currently employ a handful of independent contractors? Hiring independent contractors is a great way for business owners to decrease costs and tax liability. You utilize help when and where you need it, and don’t have the burden or a fulltime or part-time salary when business slows down.

But, it is critical that business owners take the time to correctly determine whether the individuals providing services for their companies are really independent contractors, or whether they should be classified as employees.

If they are supposed to be employees and a tax audit reveals that they are misclassified, you will likely be held responsible for paying income taxes, Social Security and Medicare taxes, and unemployment taxes on all wages paid to that employee.

How do I determine whether the worker is an employee or IC? Evaluate your relationship.

If you answer “YES” to the majority of these questions, the individual should likely be documented as an employee, not an IC.

  • Does your Company control the worker’s hours?
  • Does your Company control where the worker performs his/her tasks?
  • Do you pay for the worker’s supplies, equipment, tools, and resources necessary to accomplish his/her job function?
  • Do you offer the worker benefits?
  • Do you offer the worker vacation time?
  • Is the relationship ongoing versus temporary or seasonal?
  • Is the work performed by the worker a core service or product offering within your Company?

BE CAREFUL! As we mentioned above, the consequences of treating an employee as an IC can result in being held liable for all employment taxes for that worker (as well as any other misclassified workers). The IRS provides many valuable resources, forms, and answers to common questions. To access their information surrounding ICs and Employees, click here.

For additional information on human resource management, including wage and hour compliance, tax classification and more, contact Employer Solutions Plus.