Recent Promotion not working out? Here are 3 things to consider before demotion

Employee demotions occur for various reasons, including:

  • Poor job performance.
  • The position being eliminated.
  • Disciplinary action (for conduct issues).
  • The organization being restructured.
  • Seeking a better fit for the employee’s skill set.
  • Changing business needs.
  • Voluntary decision by the employee.

According to a study by OfficeTeam, poor performance is the No. 1 reason for demotions. In second place is a recent promotion not working out.

Although demotion may seem like the best course of action, industry experts caution that, if improperly done, the employer could face legal challenges. Consequently, demotions should be approached carefully and legally.

Before you demote an employee, keep the following three tips top of mind:

1. Identify the legal risks.

Demotions gone wrong could lead to employees filing discrimination or retaliation claims against their employers. Depending on the case, employees might claim that they’re being demoted for discriminatory reasons, such as race, gender, disability, age, religion or sexual orientation. Or they might claim they’re being retaliated against for exercising their employment rights.

Second, there’s the matter of pay cuts, which tend to accompany demotions. To avoid legal fallout, the employer must ensure that pay reductions are lawfully executed.

Third, employers need to be mindful of using demotions as a strategy for eventually terminating an employee. According to an article published by Workforce.com, employers should not use demotions as a way of getting employees to quit, as this could result in employees filing a claim alleging that they were pressured into quitting.

2. Document the reasons for the demotion.

It’s essential that you accurately and thoroughly document the reasons for the demotion, including the circumstances leading up to it — as this goes a long way in protecting you during potential litigation. This is especially important when dealing with demotions that stem from performance or conduct issues. In these situations, you’ll need to draw on key documents, such as the job description, performance reviews, action or improvement plans, company policies, and disciplinary actions taken thus far.

3. Get legal advice.

Even if your company has an established policy for handling demotions, you may still want to consult with an employment law attorney before demoting an employee. You’ll probably have many questions that require expert input, such as:

  • Is a demotion likely to correct the issue?
  • Would termination be more practical?
  • What message will the demotion send to other employees?
  • How will the demotion likely affect the employee in question?
  • What legal blowbacks are possible in this situation?
  • If demotion is the best solution, when and how should I communicate it to the employee?
  • Who else besides the employee should I tell about the demotion?

An employment law attorney can guide you in the right direction.

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3 Tips for Explaining Health Insurance to Your Employees

According to a 2016 report by the International Foundation of Employee Benefit Plans, just 19 percent of employers say their employees had a high level of understanding of their benefits.” The report cites three main reasons for this:

  • Employees don’t open or read the materials.
  • Employees don’t understand the materials.
  • Employees don’t see the value in their benefits.

The good news is that you can help improve this dismal rate of understanding. Below are three ways to do this for health insurance.

1. Make the information appealing.

As stated, employees demand health insurance from their employers. Therefore, the basic interest is already there. Your challenge lies in expanding on that basic interest. One solution is to present health insurance information in a way that captures employees’ interest.

For example:

  • Use short chunks of text, rather than long blocks, when writing emails. Short chunks of text are much easier to absorb and retain.
  • Drop the legalese. Communicate in simple, plain language that the average person can comprehend.
  • Send messages via email or text when announcing open enrollment or health insurance changes.
  • Put the information online. The website should be attractive and materials should be easy to retrieve.

2. Let a broker do the explaining.

The average small business cannot afford to maintain an on-site staff of benefits experts — whose job includes educating employees about their health insurance. A more feasible option is bringing in a health insurance broker.

Health insurance brokers spend the bulk of their time finding the most appropriate health insurance policies for their clients. They understand the ins and outs and peaks and valleys of the health insurance industry.

The broker can teach your employees the fundamentals of health insurance, such as how deductibles and copays work as well as the difference between HMOs, PPOs and health savings accounts. They can also help your employees see the full value of their health plan, so they’ll be able to maximize the choices available to them.

3. Don’t overcommunicate.

While excellent communication is central to helping employees truly understand their health benefits, be careful of flooding them with information. You want them to pay attention whenever you have something important to share, so make sure your messages are streamlined and appropriately timed. To accomplish this:

  • Avoid sending information that delivers little to no value to the recipient.
  • Speak to employees’ logic and emotions. Logic: “Here’s how your health insurance plan will change.” Emotion: “Here’s what you will gain from this change.”
  • Know when to ramp up communication and when to scale back. For instance, communicate heavily in the weeks leading up to open enrollment. Outside of that, keep messaging typically less frequent — though it should still be done as needed.

Too much noise and your employees will cease to listen. So aim for balanced communication!

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Which Employees Are Exempt From Tax Withholding?

Tax withholding is a seemingly inevitable part of working, but there are exceptions, as shown by the following information about employees exempt from withholding.

Student employees

Generally, individuals employed by a school, college or university where they are also pursuing a course of study do not have to pay Social Security and Medicare taxes on wages earned at that institution.

Nonimmigrant and nonresident aliens

Certain classes of nonimmigrant and nonresident aliens are excluded from Social Security and Medicare taxes. They include holders of A visas, D visas, F visas, J visas, M visas, Q visas, G visas and H visas. To determine precisely which nonimmigrant and nonresident aliens fall into each of these visa categories, visit the “International Taxpayers” section of the Internal Revenue Service’s website.

Family employees

Children who are employed by their parents are exempt from FICA withholding until age 18. Those providing domestic services are exempt from FICA withholding until age 21.

Employees of foreign governments

Wages paid to employees of foreign governments are exempt from FICA withholding. These employees include diplomatic and consular officers, nondiplomatic representatives and other foreign government employees working in an official capacity. Also, employees or officers of a qualified “international organization” are exempt from FICA withholding.

Government employees

Most government employees are subject to tax withholding; however, there are some exceptions. For instance, election workers are exempt from federal income tax withholding — and from FICA withholding if they earn less than a certain amount for the year.

Household employees

Employees who perform domestic services in private homes or in college clubs, fraternities and sororities are exempt from federal income tax withholding. Generally, household employees are subject to FICA withholding if they earn at least a specific amount of wages for the year.

Considerations

Employees in general are exempt from federal income tax withholding if they meet the exemption requirements for the respective tax year. For instance, employees are exempt from federal income tax withholding in 2019 if both of the following apply:

  • For 2018, they were entitled to a refund of all federal income tax withheld because they owed no federal income tax.
  • For 2019, they anticipate a refund of all federal income tax withheld because they do not expect to owe any federal income tax.

To claim “exempt” from federal income tax withholding, employees must complete and submit Form W-4 to their employer.

Keep in mind that this is just a general review of employees who are exempt from federal tax withholding. It is not exhaustive, nor does it include exemption rules for state or local tax withholding. Further, there are many nuances to consider. For instance, even though certain employees may be exempt from federal withholding, it doesn’t necessarily mean that they are exempt from paying federal taxes.

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Time is Ticking to complete Required Sexual Harassment Training in 5 Major States…Is your Organization prepared to meet the Deadline?!

Who Needs to Comply with Sexual Harassment Training…  You Do!

As more and more regulations, laws, and lawsuits continue to multiply by the dozen, the workplace has met yet another hurdle, how do we properly ensure that our staff understands what is, and what is not considered Sexual Harassment? If we can not effectively prove that our staff understands the difference then we are taking on a huge risk!

Let’s first explain why legally you will need to provide your staff with Preventative Sexual Harassment Training:

Workplace harassment, which includes sexual harassment, is prohibited by Title VII of the Civil Rights Act of 1964. Laws regarding workplace harassment, are enforced by the US Equal Employment Opportunity Commission (EEOC)

Sexual Harassment is the most common type of workplace harassment. It is so common, that recent statistics show that more then half of all workers (54%) have experienced some form of sexual harassment in the workplace. This is an astronomical number of our co-workers, friends and family who may be affected every day!

In addition to the laws enforced by the EEOC, five states (California, Connecticut, Delaware, Maine, and New York) have their own state laws specifically addressing sexual harassment, many requiring training to be provided to their staff!

California – AB 1825, AB 2053, SB 396, SB 1300, SB 1343

Connecticut – Connecticut Human Rights and Opportunity Act

Delaware – HB 360

Maine – Maine Employment Laws Revised Statute, Title 26, Section 807

New York – New York Human Rights Law § 296.1, New York City Stop Sexual Harassment Act

New York Deadline is OCTOBER 9th 2019 to have ALL employees & Independent contractors trained!

As more and more regulations, laws, and lawsuits continue to affect our workplace, Payroll Dynamics will pose these questions to you:

  1. What resources does your organization have available to ensure your staff is properly trained before this years deadline? (WE ARE LESS THEN 6 MONTHS AWAY!)
  2. Who will answer the tough questions the employee’s have about Sexual Harassment as this is a mandatory function of the training you must provide?
  3. Lastly, how will you maintain this moving forward considering all new hires need to be trained within 90 days of employment? Are you really going to hold a class for every new hire?

This new law has created a lot of work! But only if you let it be…

We have put a phenomenal solution in place that leaves you with virtually ZERO time spent on this…Keep reading to find out how easy it is to have your entire staff trained on their own time!

Remember, the Most Important Part of this Training is to PROVE that your staff understands the difference of what is considered Sexual Harassment, and what is not…This way as the employer, you know that your staff understands what is acceptable, and what is not…This protects you and your business!

But how can you prove it is understood? Thanks to our solution, this is EASY! The employees will go through an online course and be required to pass a short test following their 1 hour course. If they pass the test (which they should have no problem doing), they obviously understood the material, and their certificate will prove this!

Best of all, they can do this on their own time at their own self pace! The employees have an opportunity to pause the course slide by slide to ensure it can be done on their own schedule. Ideally, it will be done in four, 15 minute segments to keep them engaged and learning, which will make passing the test a breeze!

Here are the specs of the exam:

For Employees:

Sexual Harassment in the Workplace

Format: Online, Self Paced

Duration: 1 Hour

This online training course is meant to provide a comprehensive overview of the common issues surrounding sexual harassment in the workplace.

This is an employee version of the sexual harassment training. This course contains the following lessons:

  • Introduction to Sexual Harassment
  • Recognizing Sexual Harassment
  • Responding to Sexual Harassment
  • Sexual Harassment and the Law
  • Final Exam

Available in English and Spanish

For Managers & Supervisors:

Sexual Harassment for Managers and Supervisors

Format: Online, Self Paced

Duration: 2 Hours

This online training course is meant to provide a comprehensive overview of the common issues surrounding sexual harassment in the workplace from a manager/supervisor standpoint.

This course contains the following lessons:

  • Introduction to Sexual Harassment
  • Recognizing Sexual Harassment
  • Responding to Sexual Harassment
  • Sexual Harassment and the Law
  • Your Responsibilities as a Manager/Supervisor
  • Case Studies for Managers and Supervisors
  • Final Exam

Pricing is entirely dependent on how many employees you have, or how many seats you want to pre-buy for your growing staff…For less than $30/seat, your staff will become fully compliant…seats do not expire and anytime they are used, it will always be the most up-to-date course offering to ensure you have the newest material..To top it off,  the more seats you buy, the more savings we can pass along to you!

Give us a call today to discuss how to get your company enrolled in as little as 5 minutes

Your employees will be compliant, before you know it!

Sincerely,

The Payroll Dynamics Team

631-435-8700

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Reasons to Integrate Time and Labor With Payroll

Time and labor (also called time and attendance) involves tracking employees’ start and end times, early departures, late arrivals, breaks taken and absenteeism. Payroll involves, among other things, making sure employees are paid correctly based on their time-labor records.

The two functions are enmeshed, but at one point in time, employers had to rely on standalone systems for each one. Fortunately, as the years advanced, software developers across the globe figured out a way to unite these systems.

By integrating time-labor with payroll, employers can now increase efficiency, save time and money, and make things less stressful for their employees and payroll staff. Let’s take a closer look at these benefits.

Reduces paperwork

An integrated system captures and stores employees’ time-labor data electronically, thereby eliminating the need for paper timesheets and physical storage space.

Reduces timecard fraud

According to the American Payroll Association, over 75 percent of U.S. employers lose money because of buddy punching — which refers to the fraudulent practice of co-workers punching in and out for each other. This is a serious issue, which can be eradicated by integrating a biometric time-labor system with your payroll software. (A biometric system would require the real employee to clock in and out.)

Minimizes timekeeping and payroll errors

With an integrated system, the chances of mistakes drop significantly since the payroll staff does not have to manually calculate timesheets or enter timekeeping data into the payroll system by hand.

The integrated system improves accuracy by digitally collecting time-labor data in real time and automatically transferring the information to the payroll system, which then does the calculations based on the inputted data and any subsequent edits made. The system not only calculates employees’ time but also ensures that the time is appropriately rounded up and down.

Lowers headcount and frees up time

An integrated solution can reduce the number of staff needed for certain activities, such as timekeeping and payroll data entry. Also, supervisors can spend more time on mission-critical tasks and less time policing attendance.

Improves regulatory compliance

One of the biggest payoffs of merging time-labor with payroll is that the system helps keep you in compliance with federal and state wage and hour laws. Because accuracy is improved, there are fewer wage and hour complaints by employees and fewer penalties from the government.

Enhances reporting

An integrated solution offers more dynamic reporting options than a standalone system. Since the data is centralized, your payroll staff does not have to log in to different systems to generate reports. With just one login, they can create reports on work hours, break times, absences, regular wages, overtime and more.

These benefits are all the reasons you need to integrate your time and labor processes with your payroll system.

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Who Is Excluded From the FLSA’s Minimum Salary Requirements?

Executive, administrative and professional employees who meet the FLSA’s job duties and salary basis criteria are exempt from the act’s minimum wage and overtime pay provisions. Per the FLSA, these employees must be paid no less than $455 per week on a salary basis. However, the following positions can be exempt without having to fulfill this standard salary basis test:

Certain computer professionals can be paid either the minimum salary requirement of $455 per week or on an hourly basis of at least $27.63 per hour.

Business owners who are employed in a bona fide executive capacity, own a minimum of 20 percent equity interest in the company where they are employed and are actively engaged in the management of the business are exempt from the FLSA’s salary basis test.

Teachers are exempt from the salary basis test if their primary duty involves teaching, tutoring, instructing or lecturing in an educational establishment. This includes:

  • Regular academic teachers.
  • Kindergarten and nursery school teachers.
  • Automobile driving instructors.
  • Teachers of gifted or disabled children.
  • Certain music instructors.
  • Home economics teachers.
  • Teachers of people in skilled and semi-skilled occupations.

Outside sales employees are exempt from the salary basis test if their primary duty revolves around either of the following:

  • Making sales.
  • Obtaining service orders or contracts.

These primary duties must be customarily and frequently performed away from the employer’s place of business.

Employees who are licensed to practice — and are actually practicing — law or medicine, or any branches of these professions, are excluded from the salary basis requirement. This includes employees who hold academic degrees for the general practice of medicine and are working in a related internship or resident program.

Employees in the motion picture producing industry do not have to be compensated on a salary basis if their base rate of pay meets a specific amount, as defined by the FLSA. As of Dec. 1, 2016, the minimum base rate of pay is $1,397 per week, excluding board, lodging and other facilities. Starting on Jan. 1, 2020, and every three years after that, the base rate of pay will be adjusted.

Administrative employees in educational establishments can either be paid a salary or fee of at least $455 per week or a salary that at least equals the starting pay for other teachers in the same educational institution.

Employees working in American Samoa for a nonfederal employer are subject to a lower salary level requirement — which is 84 percent of the standard minimum salary.

All of the above-stated employees do not have to meet the standard salary basis test, which requires a weekly salary of at least $455. But they are exempt provided they satisfy all other FLSA requirements for their position.

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Inclement Weather and Your Payroll Obligations

Hurricanes, storms, tornadoes, blizzards, floods and other weather-related disasters can cause inclement weather closures. But even if one of these calamities causes your business to close, your employees must still be paid on their next regularly scheduled payday if they did any work during the pay period.

To ensure accurate payment, you’ll need to take federal and applicable state laws into consideration.

Nonexempt Employees and Inclement Weather

The Fair Labor Standards Act (FLSA) says that employers must pay nonexempt employees for all hours worked. Therefore, you do not need to pay these employees for business closures, including those caused by inclement weather. However, if a nonexempt employee shows up and works for two hours before your business closes due to inclement weather, he or she must be paid for two hours for that day.

Under the FLSA, you can require that nonexempt employees use their available paid time off to cover time missed due to inclement weather. However, some states do not allow employers to mandate that employees use their accrued PTO as a substitute in these instances, so be sure to check your state’s stance on this issue.

Also, some states have “reporting time” pay laws, which require that employers pay nonexempt employees for a minimum number of hours if they arrive at work as scheduled but are sent home early.

Exempt Employees and Inclement Weather

According to the FLSA, employers must pay exempt employees their full salary for any workweek in which they perform any work. The FLSA permits certain deductions to be made from exempt employees’ salaries, but business closures aren’t one of them. Therefore, if your business closes for less than one week due to inclement weather, exempt employees must receive their full salary for that week if they did any work at all during that week.

You do not have to pay exempt employees if the business closes for the entire week and they performed no work during that week.

As is the case with nonexempt employees, the FLSA allows you to require that exempt employees use their accrued PTO for inclement weather closings. But, as stated, you’ll need to check state law, since not all states allow this substitution.

With regard to exempt employees who have exhausted their PTO, you must still pay them their full salary for the workweek if they do any work during that time. But you don’t have to pay them anything if they perform no work for the week and have no available PTO to cover the missed days.

Paychecks don’t have to be delayed because of inclement weather

You can’t control the weather, but you can take measures to ensure your employees are paid on time when disaster strikes. A large majority of U.S. workers are paid by direct deposit, so making sure paychecks are handed out is moot. Offer this service if you aren’t doing so already, and encourage employees to take advantage of it.

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