Affordable Care Act

6 Trends in Employee Management and Payroll

Payroll-circle.png

Extra time is a scarce resource when you’re a business owner. Managing all your day-to-day responsibilities keeps you plenty occupied, leaving little time to keep up with the latest developments in business management and technology. But it’s vital to think about the big picture and consider new ways to make your business run more efficiently.

In this blog post, we’ll explore the latest trends in employee management and payroll technology. Modern payroll software has many advantages that allow for employers to engage with their staff in new ways. Here are six trends in employee management and payroll all business owners should know:

1. New types of employees

It’s becoming more common for businesses to hire employees on a short-term or part-time basis. These types of workers can help out during busy times or provide the necessary skills for specific projects. However, these new types of employees are often given different compensation and benefits than full-time employees.

Classifying these employees correctly and keeping the proper records has become much easier than it once was. Using modern payroll software, you can easily add temporary employees and set them up to be paid accordingly.

2. Outsourcing to 1099 contractors

Like short-term and part-time employees, 1099 contractors are becoming a popular alternative to hiring full-time staff. There are some major differences between 1099 contractors and W2 employers, including how income tax is withheld.

Cloud payroll software allows you to classify contractors and employees correctly, so you can avoid issues with the people who work for you and the agencies you pay taxes to.

3. Staying compliant

Every business is required to provide specific information to the IRS in order to comply with tax regulations. And the responsibility has grown in the past few years with the Affordable Care Act taking effect.

The good news is cloud payroll software helps business owners with their tax requirements. It can calculate what you owe in taxes and auto fill the necessary forms for you. You can then e-file the forms online, often directly from the payroll software.

4. Connect payroll and accounting software

More and more businesses are continuing to adopt cloud software since different systems are able to connect and share data. For example, after your staff gets paid, your payroll software can automatically update the general ledger in your accounting software. It can also connect with your HR system and update the benefits accrued by each one of your employees.

5. Access for your staff

You’ve probably experienced employees asking about how many hours they’ve worked during the pay period or the number of PTO days they have available. Keeping track of these details used to be difficult for employees but they now have this information at their fingertips.

Your employees can access your payroll software and get a complete view of their hours, wages, benefits, and more. They’ll only have access to their own personal information so no sensitive company information is at risk.

6. Automate pay day

Paying your employees is traditionally quite the endeavor. You have to calculate the correct hours, wages, and withholdings for each employee and ensure everyone’s final pay is absolutely correct. You also need to meet very specific deadlines so checks and direct deposits are prepared in time for pay day.

The process is now much easier. Your employees can enter their hours into your cloud-based payroll system and it will automatically calculate everyone’s correct pay. All you need to do is review the details and make sure everything is accurate.

Advancements in technology are changing the way people work and get paid. By taking advantage of the capabilities of cloud payroll software, you can save time and have the confidence that your business is meeting its employment and tax responsibilities. You can also hire different types of workers that meet your business’s specific needs and know they’ll be compensated correctly without any extra work on your end.

BookKeeping Express (BKE) provides payroll services for small and medium-sized businesses. We can set up a modern, cloud-based payroll system for your business and help you manage it. Visit our payroll features page to learn more.

 

The Affordable Care Act: Should You "Pay or Play"?

By Lauren Crum  Email Lauren

As the Affordable Care Act (ACA) continues to take effect, certain employers will need to decide if they should “pay or play.” This one-or-the-other scenario is a simple way to sum up the decision many businesses face under the Employer Shared Responsibility Provisions of the ACA. Should you provide your staff health coverage (play) or instead pay a tax penalty that goes towards funding the public health insurance marketplace (pay)?

Who does the Employer Shared Responsibility Provisions apply to?

The Employer Shared Responsibility Provisions went into effect this year, requiring businesses with 100+ full-time employees to chose whether to “pay or play.” Starting in 2016, employers with 50-99 full-time equivalent employees will also be required to choose one or the other.

If your business meets this criteria, you’ll face a big decision next year and beyond. With the right research and planning, you can make an informed choice that could potentially save your business thousands of dollars.  

So should I “pay or play”?

In order to figure out the best course of action for your business, the first thing you must do is identify your full-time employees. Full-time employees are those working an average of 30 or more hours per week. You’ll then need to determine how many "full-time equivalent" (FTE) employees you have on staff. FTEs are calculated by adding all the part-time employee's hours and dividing the total by 30. If the sum of full-time employees plus full-time equivalents is more than 50, your company is subject to the Employer Shared Responsibility Provision for 2016.

The next step is to project the costs your company would likely spend on healthcare for your full-time staff. Start by taking a census of your full-time employees to determine who is covered under a spouse's or parent's plan (which excludes the employee from being covered under your plan). Then, ask the employees who are not covered if they plan on choosing health coverage under your company’s plan for the upcoming year. Once you have the number of interested employees, your health insurance broker can use this information to give you a projection of costs for your company.

Your company can use these projections to determine the most cost-effective way to offer your employees health coverage and comply with the ACA. If you decide to play, BookKeeping Express (BKE) provides services to help you onboard new hires and enroll them in benefits when they become eligible. If you decide to pay, you will need to make monthly payments to the IRS throughout 2016 based on the full time employees you have on staff. Most major payroll providers offer services to track full-time employees and submit the required reports to the IRS. If you don't currently work with a payroll provider, contact BKE and we'll help you get started.

It's Time For Large Employers To File New ACA Forms

By Lauren Crum  Email Lauren

2016 marks the first year that large employers will have to report on health coverage offered to their staff under the Employer Shared Responsibility provision of the Affordable Care Act (ACA). You are considered a large employer if you employed at least 50 full-time staff members during 2015, including full-time equivalent employees (FTEs). The ACA’s employer mandate, which fines companies who do not offer health benefits to full-time employees, only applied to companies with more than 100 employees for 2015. That means if you employed between 50 to 99 full-time employees or FTEs in 2015, you won’t face fines for not offering health benefits, but you are required to report on any coverage you did (or did not) offer by using new IRS forms.

In order for your company to complete the required forms, it’s beneficial to start gathering information now since it could be scattered across multiple systems and administrative areas. You’ll need the following information to complete the reporting:

  • Full-time employee names
  • Employee addresses
  • Health coverage offered to employee, if any
  • Employee’s share of monthly premium
  • Number of months employee was enrolled in coverage
  • Full-time employee counts by month
  • Total employee counts by month

There are two key forms that employers must complete by certain dates in order to report on health coverage provided in the previous year.

Form 1095-C  by January 31, 2016: Employers must provide a 1095-C form (Employer-Provided Health Insurance) by mail to the last known permanent address of all employees eligible for coverage in 2015, whether the employee participated in the coverage or not. This form provides details about any coverage offered to the employee, the lowest-cost premium available to them, and the months of the year when the coverage was available. The employee will then attach this form to their tax return for 2015.

Form 1094-C by February 29, 2016: Employers must file a 1094-C form (Transmittal of Employer-Provided Health Insurance) with the IRS by February 29, 2016. This is a cover letter to the IRS and includes information about the employer such as address, phone number, employer identification number, number of employees, and name of a contact person. This form also summarizes the eligible and covered employees that were sent Form 1095-C.

Preparing these forms can be a little intimidating. However, if either of these forms are filed late or are inaccurate, there is minimum penalty of $100 for each. If you are a large employer and use a payroll provider, they’re likely your best resource for assistance with your reporting. Most payroll companies now provide services that track your employee’s eligibility for health benefits and will generate the 1095-C and 1094-C forms, much like they do for your W-2s or 1099s.