Archive for August, 2009

HR Growth Challenges, and Solutions. Client Case Study – Part II

Wednesday, August 26th, 2009

In our last post we studied the challenges facing a prestigious cardiovascular medical clinic as their employee base grew and the Executive Director found himself overwhelmed with employment issues. In this post, we will examine how Human Resources Outsourcing alleviated their HR woes.

HR Solutions

Upon entering the HR Outsourcing relationship with the practice, a CPEhr Human Resources Specialist immediately began to review their policies and employee documentation. Many gaps in employment protocol were identified. An array of new employment forms were created, compliant procedures were implemented and new guidelines were put into practice. The Director and Office Manager received training on proper employee review and termination procedures, and their designated HR Specialist was invited to attend exit interviews and assist in the termination process. “I have run the office for more than a decade,” says the Director, “But knowing CPEhr is here to guide me through all employee matter offers tremendous peace of mind. Now, instead of being distracted by minor personnel issues, I can focus on the practice. CPEhr has truly become our partner.”

The most critical assistance occurred when the practice decided to outsource their billing function and to layoff the entire department. CPEhr assigned several HR staff to assist in the layoffs, with proper termination procedures, protocol and severance packages that were in the best interest of both the practice and the employees. The Director sums up the incident succinctly: “We could never have done this on our own.”

Real Results

Since joining CPEhr, he feels that the day-to-day protection he experiences in the area of employment exposures is immeasurable. “I now have tremendous peace of mind. CPEhr has become our ‘go-to resource.’ Without this type of relationship we end up making our own decisions, without proper knowledge of the law, and will ultimately make a mistake. You think you can use common sense, but common sense and the law rarely match!”

The Director says the benefits of CPEhr were immediately realized, as the new systems and processes were implemented and functioning within 30-60 days. “I recognize the reality that as the practice grows. So too would the need to hire an HR Manager. However, by outsourcing to CPEhr , we don’t need to spend the money on another hire and can use those funds to invest back into patient care and clinical research.”

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HR Growth Challenges, and Solutions. Client Case Study – Part I.

Tuesday, August 25th, 2009

As the economy continues to improve and stabilize, the time will soon come that employers will be refocusing on growth and profitability. It may also entail rehiring staff, restructuring the organization, or simply concentrating on areas that have been left on the side. Certainly, proper employment administration and oversight will be priorities to get back on their feet. However, with the demands of rebuilding, many employers may be unable to spend the necessary time focusing on their staff. Read about one organization that found a different way – through Human Resources Outsourcing.

Company Background

This medical practice was founded in 1980 with the mission to provide the highest quality health care combined with clinical research and education. It is currently one of the few cardiovascular practices in the country that balances private practice with academic medicine, and runs one of the world’s largest cardiac transplant programs. They currently employ over 30 employees, but are expecting to significantly grow their employee base in the coming months.

It was obvious to the Executive Director of this prestigious medical practice that his time would be best spent on providing superior patient care and conducting scientific research. Managing employee issues should have been the last thing on his mind. Unfortunately, it wasn’t.

Business Challenges

As the practice grew in size and prestige, the Director recognized the critical role Human Resources played in his practice. “We do not have a dedicated HR staff,” he explains, “But I understand that human resources can’t be put on the back burner. HR is still a critical part of our practice.” With the lack of sufficient internal HR resources they struggled to standardize employee practices and stay abreast of changing employment regulations. While the Director and his Office Manager continued to personally handle the employee relations, an incident pushed them to consider outsourcing their human resources to a professional firm.

An argument ensued between two front office staff, and the altercation ended with one employee threatening to physically harm the other. The event was witnessed and the employee was let go. A short time later she sued the practice for race discrimination. Even though, at the time, the Director was sure he was doing the right thing, he ended up in an 8 month lawsuit with the EEOC that cost him hundreds of hours of time and distracted him considerably from running the practice. While he ultimately won the case, he realized it was time to work with human resource professionals. He needed a firm who would help him structure an HR system to prevent this from recurring, and to take over the administration of a lawsuit if one ever occurred again in the future. “As our firm continues to grow and we open new offices, managing the staff in multiple worksites is only going to become more complicated,” he says. He invited CPEhr to present their outsourcing HR solution, and quickly engaged their services.

To be continued…

In our next post we will examine the solutions CPEhr provided, and the real, tangible results the client experienced.

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The Three Most Common Payroll Tax Mistakes… Are You Guilty?

Monday, August 10th, 2009

There is no doubt that the laws surrounding payroll and payroll tax submission are difficult to master, even for the tax accounting specialist. Consider the following statistics:

  • The tax code (the basic law written by Congress) is 2,840 pages.
  • The IRS regulations add an additional 46,000 pages.
  • The combined number of forms for businesses and individuals is now over 480

Internal Revenue Code (IRC) 6656 reviews penalties for late payments of payroll deposits. A deposit only ONE day late will result in a penalty equal to 2% of the delinquent amounts. It jumps to 5% for payments made 6 days late, and doubles to 10% for payments made 16 or more days late. A recent report states that over 1 MILLION tax penalty statements are sent out quarterly.

Three Common Payroll Tax Mistakes

Simple attention to the details can often reduce the risk of missing a tax payment, or making an incorrect deposit. Below are three common mistakes that can typically be avoided easily:

1. Submitting Deposits Late
Once you have withheld taxes from the employee, it is important to know when and how these taxes, along with the employer contributions, must be paid.  There are many regulations at the Federal and State levels that dictate when and how payments are to be remitted.  If payments are late, penalties and interest can be assessed. Contact your accountant, bookkeep or payroll vendor to find out your payment obligations.

2. Late or Incorrect Payroll Tax Return Filings
There are numerous Federal and State returns that must be filed for payroll taxes, including withholding, unemployment, local and school district taxes.  All have different reporting requirements (paper, e-file, mag media, etc.) and due dates.  If proper procedures are not followed, penalties and interest can be assessed.

3. State Unemployment Insurance Rates not Updated

Most States update employer SUI rates annually.  It is important to update the payroll software with the new rates, so taxes are properly paid.  Underpayment of taxes can result in penalties and interest. Once again, contact your CPA for this information.

Avoid the Obligations Altogether – Outsource it.

Most small employers recognize they are unable to stay abreast of all their payroll tax obligations. Many outsource payroll to a payroll vendor, such as ADP or Paychex. However, many more employers are now turning to Professional Employer Organizations (PEOs). A PEO “co-employs” the client’s worksite employees and assumes the payroll and tax obligations of the client. The payroll is reported under the PEO’s Federal Tax ID Number, which in turn provides a layer of compliance to the business. IRS audits, payments and inquiries are directed to the PEO, which has teams of payroll and tax specialists on staff.

While the concept may sound foreign at first, thousands of employers have found that a PEO is precisely the cure to the payroll tax headaches they have been looking for. Learn more about PEO Payroll Tax services here.

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Educated Management Will Keep You, and Your Company, Out Of Trouble

Wednesday, August 5th, 2009

Our last post listed five management best-practices to avoid lawsuits. Let’s take a more detailed look at the first one – educate your managers.

Here is the simple take-away from today’s post: Management is an extension of their employer. As such, management practices can be pinned back to the employer, who can ultimately be held responsible for the managers’ actions.

What is a Manager?

Managers are the primary contact with most of the rank-and-file employees in an organization. Whether it is an office manager in doctor’s office, or the warehouse manager in a storage facility, or  inventory manager in a retail operation, all managers interact with their staff on a daily basis. In an informal poll taken by AllBusiness (a division of Dunn & Bradstreet), managers were asked, “What is a manager’s role”? The answers were wide-ranging, but all shared the same underlying theme – daily oversight of the staff:

“A manager’s role is to provide proper oversight and direction to a group that is trying to accomplish a certain task. They may also act as a mediator between those under him. Managers may need to be called upon at times to be disciplinarians or morale boosters.”

“To make sure the place runs smoothly.”

“A manager’s role is to maintain a productive atmosphere while conserving cost. He is the  communication link between the employees and upper management.”

Another question posed was, “What do you like about managers?” Again, the answers revolved around staff interaction:

“I like managers when they fulfill their job with respect toward their employees. Also, when they show understanding and use their authority with kindness.”

“They have the answers to our problems.”

“When a manager does his job right, it promotes a pleasant atmosphere to work in.”

“They keep the workers organized.”

So what is the point?

The point is simple – for a manager to effectively do their job, they must be educated on the proper methods of discipline, motivation, and management. These tasks may seem like common sense and simple enough to implement. However, in fact, dozens of State and Federal laws dictate precisely how managers can treat employees, speak to them, discipline, warn, and terminate them.

Some of the most important laws governing these areas are:

  • Title VII of the Civil Rights Act of 1964 (Title VII), which prohibits employment discrimination based on race, color, religion, sex, or national origin;
  • the Equal Pay Act of 1963 (EPA), which protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination;
  • the Age Discrimination in Employment Act of 1967 (ADEA), which protects individuals who are 40 years of age or older;
  • Title I and Title V of the Americans with Disabilities Act of 1990 (ADA), which prohibit employment discrimination against qualified individuals with disabilities in the private sector, and in state and local governments;
  • Sections 501 and 505 of the Rehabilitation Act of 1973, which prohibit discrimination against qualified individuals with disabilities who work in the federal government; and
  • the Civil Rights Act of 1991, which, among other things, provides monetary damages in cases of intentional employment discrimination.

Educated Managers = Safe Employers

So, while you may have hired your manager to “make sure the place runs smoothly”, or to “maintain a productive atmosphere”, equally, if not more important, is to make sure your management team is aware of the laws that govern their daily interaction with their staff. If you follow the steps below, you’ll be on your way to protecting your company, and yourself, from lawsuits:

  1. Make sure management is familiar with all company policies and procedures
  2. Managers should actively review the Employee Handbook
  3. They should be familiar with the company Mission Statement.
  4. Managers should be positive role models, always acting ethically with motivational leadership skills.
  5. Act professionally at all times.
  6. Encourage management to attend training classes to further educate themselves.
  7. CONSTANTLY and CONSISTENTLY contact the Human Resources department before taking employment-related action.

In summary, encourage and provide learning opportunities to your management staff. Make it clear to them that conscious application of that knowledge is expected on a daily basis. Following these best practices will go a long way to help you and your business keep a motivated workforce, and stay out of trouble.

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