We saw an interesting question come across our desks recently in an email: “Are employers required to have an introductory period for new employees?” We will cut to the chase and tell you right up front that the HR professional answering the question said, “No, you don’t.” It’s been a long-standing practice of many companies to have a 30, 60, or 90 day period that they call an “introductory period,” but there is no legal requirement to do so…however, this is one of those times when it’s a good idea anyway.

Not On Probation

Before we go further we want to address the older practice of calling this period of time a “Probationary Period.” This term seems to go back to what labor unions would call the initial time frame of a new employees tenure when they were not covered under the union’s collective bargaining agreement with the employer. Once the period was complete, the employee got full rights under that agreement. The idea carried over to non-union jobs but without the conference of additional rights after the time frame was complete…and this eventually led to legal trouble.

More recent court decisions have made it more clear that if an employer has a “probationary period” (and calls it that), that the implication is that there are additional employment rights granted the employee after the time frame is over, even in at-will work states. So…probationary periods magically became introductory periods.

Still A Good Idea

As stated above, it’s not legally mandated that a company gives employees an introductory period, however, it still can be an excellent idea as it has advantages to both you and the person you are hiring. A 60 to 90-day introductory period can give you a chance to watch a new employee closer, scrutinize their performance, and assess whether their performance and skills are adequate for the job, as well as whether they fit in well with the company culture.

While you may be watching for evidence of their skill set, the employee can be using that time to become acclimated to their new role while adapting and honing their skills to the tasks at hand. You may have hired them because of what they were able to demonstrate at a previous job, but it may take some time to become as effective in a new environment.

During this adjustment period they need to learn new job functions, meet and learn the habits of new colleagues, and become familiar with your company’s policies. If they are under the auspices of an “introductory period,” this process can take place without as much stress and anxiety.

You, as the employer, may find this time especially helpful in being able to offer critical feedback and coaching to the new hire as you see the things they are not doing up to your standards. This can be a time when you can clarify your expectations for the job and help get the employee aligned with the company.

Some companies have taken to calling the time an “evaluation period” and it’s important to note that this evaluation goes both ways. The employee needs time to see the company “in action,” to learn the policies and standards…and decide if this is really a good workplace for them.

For the new employee, this introductory period may serve as a milestone…a time frame in which they can expect to get up to speed with the new place and decide whether or not they want to commit to staying there longer term.

For the employer, it gives them time to gradually get that employee to where they want them to be…because hiring someone new and training them is a costly prospect! You don’t want to have to keep going back to the well, looking for someone new, and beginning this process all over again. 

How do you reward the employee for completing the introductory period? That’s up to you and your company policy, but some companies start vacation and sick time accrual or full medical benefits kicking in after that point.

Whatever you decide to do, I can’t stress enough…make it part of your company’s documentation…put it in the employee handbook! It’s always a great idea to keep a record of what the expectations are for new employees and when they are expected to meet them…and to make that information plain and easily findable for those employees. 

References: 

• SHRM
• Prosit Business Consulting

Need help with onboarding and HR policies? Southern Payroll & Bookkeeping handles payroll, HR compliance and bookkeeping for small and mid-sized businesses. See our payroll and HR services, book a free consultation or call (423) 207-2497.

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What Are “Fringe Benefits?”

The short answer, according to the IRS, is “A fringe benefit is a form of pay for the performance of services.” A lot of times an employer offers these fringe benefits in addition to salary as an incentive for employees; they can take the form of awards, prizes, gift certificates, use of company vehicles, and more. 

Here’s the trick, though…some fringe benefits are taxable and others don’t need to be reported or taxed. Whoever handles your payroll has got to know the difference!

What’s Taxed…What’s Not?

It’s probably easiest to start with those specific categories of benefits that are NOT taxed. I’ll bet you know what the big one is: health insurance. If you are providing your employees health insurance…Great Job! And they don’t need to pay taxes on it, which is even better. Other non-taxable things you can provide employees are on-site meals and athletic facilities, adoption assistance, educational assistance, and disability insurance.

Once you get beyond those things, though, you need to report adequately and make sure withholding is done when possible…things like bonuses, group term life insurance, and the company car are going to be considered like income for the employees. So you have to make sure you document those items correctly for yourself and the employee.

Why Are Things Changing?

The IRS keeps track of something called “The Tax Gap.” Basically it’s the amount that is “true tax liability” and the amount that is paid on-time and in full. It is made of “the nonfiling gap, the underreporting gap, and the underpayment (or remittance) gap. Something in the neighborhood of about 85% of all owed taxes are paid on time; one of their new focus efforts is to increase that number and one of the areas they are focused on reportedly is fringe benefits.

It’s generally believed that fringe benefits present an opportunity for employers or employees to misrepresent or underreport their taxable income…whether intentionally or by accident. Increasing the scrutiny of these benefits during audits can reveal these errors and cause someone to have to owe more in taxes than they previously believed. If it’s found to be a systematic error by a company or their bookkeepers, that could lead to greater scrutiny of the business and the possibility of it being looked at as tax evasion.

How Should You Respond?

The first thing is to make sure you are properly reporting the fringe benefits you are providing to employees. And that includes non-taxable and taxable benefits. Make sure to provide solid documentation for both types and for each provided perk. The more documentation you are able to provide, the less likely that your company or your employee will attract closer scrutiny.

These matters can be extremely confusing and changes occur all the time. Unless your business is actually bookkeeping, you probably won’t be able to keep up with all the changes and updates, all while still performing the job that brings in the buck effectively. Because of that, we highly recommend you hire a bookkeeping service to do these things for you.

Southern Payroll & Bookkeeping keeps tabs on what needs to be recorded and reported…and why! Our team of experts will keep you in tax and regulatory compliance at local, state, and federal levels, all while allowing you to concentrate on the things that can make your company a success. Want to know more? Call us at 423-207-2497 and make an appointment to see how we can help you and your business!

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If your hotel caters specifically to a younger crowd, how surprising is it going to be when you look across the desk at your best candidate and find out he’s in his late 50s? If you are looking for someone to come in and do a job regularly for the next year, how disappointing is it going to be when your best candidate comes in obviously pregnant?

Both of these are good illustrations of how discrimination can become an issue in the workplace. Can you deny a person a job because of their age? Or because you assume they have a medical condition that would hinder them from doing the job?

According to the EEOC, discriminating against someone “means to treat that person differently, or less favorably, for some reason. Discrimination can occur while you are at school, at work, or in a public place, such as a mall or subway station. You can be discriminated against by school friends, teachers, coaches, co-workers, managers, or business owners.” (EEOC.gov)

Workplace discrimination, whether based on race, gender, age, religion, or some other factor can definitely contribute to the feelings of a hostile work environment, cause stress to the employees discriminated against, and put the company into legal jeopardy, both civil and criminal.

The Law

There are multiple layers of anti-discrimination law to contend with at any one time, but no matter what state your business is in, you must comply with the federal mandates. The Equal Employment Opportunity Commission defines specific “protected classes” that include “ race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability and genetic information (including family medical history).” Furthermore, employers are prohibited from retaliation or punishment against applicants, employees, or former employees for filing a charge of discrimination, participating in investigations, or opposing discrimination.

The specific laws you need to be aware of include  the Age Discrimination in Employment Act (ADEA), Equal Pay Act, Genetic Information Nondiscrimination Act (GINA), Americans with Disabilities Act (ADA), and Title VII of the Civil Rights Act of 1964 (including the Pregnancy Discrimination Act).” (Gusto)

State and local laws may offer additional employee protections. For instance, last year Tennessee passed the CROWN Act, making it illegal to discriminate against persons based on their hairstyle. We wrote all about it if you need to catch up.

Also realize that you don’t have to mean to discriminate for an action to be illegal…you can be legally responsible with or without intention.

How To Respond

If you have an employee that complains about discrimination in the workplace, your very first move must be to investigate the claim. Make your investigation as thorough as you are capable of and keep meticulous records of it. Like an actual court trial, you should go into the investigation assuming neither guilt nor innocence on anyone’s part…and you should never promise a specific outcome to the employee or the accused.

When the investigation has been complete, document your conclusions (again…thoroughly) and the actions you took. If the accused did intentionally or unintentionally discriminate against the accuser, you need to take the appropriate disciplinary action, which can include termination. I would strongly urge caution and repeat the need for thorough documentation if it does lead to termination, though, as that person may find some reason to file their own complaint.

Make whatever changes you need to in your official company documentation and employee manual to reflect that discrimination in the workplace will not be tolerated at any level. Then spell out the punishments that are on the table in cases where it does occur.

Putting everything in writing, both during the investigation and after—as well as spelling out violations and consequences for the future—is paramount in protecting your company from legal trouble at local, state, and federal levels. 

Do your best to inspire and grow a workplace culture that is open, friendly, and inclusive. Make sure employees are properly trained in what is not allowed, promptly address any complaints, and consult with legal professionals to make sure you stay in compliance with anti-discrimination laws.

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Sometimes the solution may be transparently clear…one of them has got to go! But what if both are good employees…GREAT employees!…doing their jobs to the best of their abilities, but they just don’t personally get along? This can cause unexpected challenges in the workplace and call for creative solutions.

Communicate Effectively

Mike Krzyzewski…Coach K”…said “Effective teamwork begins and ends with communication.” I’ve pretty much lost track of the times I’ve mentioned communication in these blogs…but it really is the most powerful tool you can wield in any type of relationship: romantic, friendship, or work.

The thing you can do as a business owner or “the boss” is to always encourage open communication. In the case of clashing employees, that may mean setting up a meeting between them. As much as the expression is overused these days, create a “safe space” where both parties can say what they mean…what is making them upset, what concerns do they have about the other one…these things can help you get to the root of whatever misunderstandings that exist. Make sure both parties understand that they need to act respectfully to the other and listen actively during this discussion.

Doing this can help to promote better empathy and understanding. It’s very possible that one person is offended by the actions of another without knowing underlying reasons that would cause them to give that person a little more slack…or perhaps even a helping hand. Once people make an effort to understand each other and where the other person is coming from, they can find common ground and shared goals, and in time they may develop a deeper cooperation and collaborative atmosphere.

Encourage Better Teamwork

One great way of encouraging more cohesion on your team is to provide opportunities for training and professional development. That might take the form of workshops on conflict resolution or communication skills…or it might be something a way to reinforce communication and teamwork like a job skills training day where the participants have to rely on each other as much as themselves in order to properly and efficiently get the job done.

No less a business genius than Henry Ford said, “If everyone is moving forward together, then success takes care of itself.” If you can get the members of your team communicating better, you’ve made the first step toward getting them “moving forward together.”

Of course, there’s always the old fall back…of team building exercises where “fall backs”…or “trust falls”…may be part of the day. Team-building exercises can sometimes be looked at with cynicism, so it might be best to not call it that…and to make it more of a “fun outing” for the company. Whether it’s a company day of zip-line adventures, canoeing teams on a lake, or bowling, you can surely find something that helps your team members forget about work for a while and not focus on the fact that they’re being softly goaded into being a better team through fun leisure activities.

Set Parameters

“We are free to choose our paths, but we can’t choose the consequences that come with them.” – Sean Covey

Encouraging good communication and fostering better teamwork are essential to getting beyond bruised relationships between your team members, but as “the boss” you need to remember that at some level, you must also establish clear expectations for behavior.

This comes down to a more private conversation you should have with each of the divisive parties in turn. Be clear with what it is about their behavior that you believe is causing a problem and what they can do or change in order to make it better. Without participation from both parties, you may not ever reach the desired resolution, however you should do your best to get buy-in from them both.

Then you need to watch the situation and the actions of the parties involved, while being able and willing to provide feedback when it’s needed. If one of them steps out of line, you need to be able to pull them aside…quietly, if possible…and let them know how they can do better.

But there also need to be boundaries. Both sides of the equation need to know that if you cross “this line” one too many times…or don’t improve behavior by this date…or if we lose that customer because of this conflict…there will be consequences. From disciplinary action to termination, the consequences need to be very clear and you need to follow through on them.

Call in Professional Help

“Peace cannot be kept by force; it can only be achieved by understanding.” – Albert Einstein

You tried everything above and it’s still not quite enough…maybe it’s time to bring in external help. This could also apply if you are just too busy to do all the above or if interpersonal relationship counseling just isn’t in your toolkit. For whatever reason, a professional might be the right answer.

“Business therapists” are a thing these days. Sometimes they work with the leaders of companies…people who just don’t have many peers in the company…sometimes they work with team members to facilitate a better working environment. Being an outsider…and one trained in human behavior, at that…a business psychologist can help to identify where the business’s pain and friction points are, then offer advice to leaders and team members on how to smooth out some of those areas.

While this may seem like an extreme strategy, if you have team members that you feel your company would suffer greatly to lose, having a behavioral expert come in to assess the situation and offer their help might save you a great deal of time and money.

Conclusion

As with so many things in life, a good resolution to this problem has to begin with clear and effective communication. Combine that with the other steps and you stand a much better change of creating a harmonious work environment, as well as a positive an productive workplace culture. That is something you should care about intensely…happy employees will work more efficiently—saving the company money—while giving a better image of the company to outsiders—all of whom are potential customers of yours!

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We believe that people who work for small businesses should know that they are valued and feel taken care of. Small businesses are the backbone of our country, and we love that their employees are a name, not a number. If you want to make sure that your employees know their worth, these 4 tips will definitely help you create the workplace of your dreams.

1. Employee Engagement

Keeping your employees engaged is vital for your businesses success. Making sure that your employees stay happy, incorporate fun into your HR strategy. Some ideas to do this are:

Incentives. These can be financial or non-financial, such as rewards and recognition. This will give your employees something to work towards, as well as reinforce good attitudes.

Employee Surveys. Sending out a survey for your employees to submit anonymously can both let them know that they are heard and known, as well as give you, their employer, some insight onto how they are feeling about your company culture and environment.

Games. Achievement tracking and some friendly, peer competition is a great way to keep your employees engaged.

2. Career Advancement

As you probably know, your businesses most important investment is your employees. Setting an advancement program into place gives employees a chance to progress and grow both personally and professionally.

This will also help to nurture talent within your organization, which reduces the time and money spent while hiring outside employees.

3. Legal Requirements

When you are on-boarding a new employee, it is always important to fulfill all legal requirements set by the IRS. This will not only protect the employee, but it will also ensure that your business stays protected.

To read more about the IRS rules and regulations for hiring employees, visit their website here.

4. Your Corporate Image

When running your own business, it is important to maintain a strong and positive corporate image. This can help attract top talent to join your team.

Remember to keep these questions in mind:

How is my company reflected on social media?

Does your company branding reflect its culture and enviroment?

Does your staff have access to everything that they need to succeed?

We know you care about your employees, and we want your small business to succeed. If you have any more questions about HR or you would like to speak to one of our HR professionals, visit our website here.

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How to get your business ready to hire:

1. Take a step back and think about if you need another employee. We know that is easy to feel overwhelmed with the responsibilities of owning your own business. Be very specific about the work that you need done by this employee and evaluate the time that it will take them. Make sure that you do the math on how many hours a week it takes to do the type of work that you are thinking about hiring for. If it doesn’t add up to a full time schedule, it will probably not be worth it to hire a full-time employee. Hiring someone on full-time is an ongoing cost for your business. Remember to think very carefully about whether you should hire an employee or a contractor.
2. Ask yourself if your business is actually ready to hire someone. Can you afford the costs of a hire? You need to remember that it will cost you more than just salary to pay them. Make sure to do a cost-benefits for your time. Is the role you are hiring for defined? When it comes to hiring someone, you need to make sure that your company values and policies are established and that you plan to hire according to them.
3. If you answered “yes” to the last two points and have decided that you are going for it, then it is time to get your EIN. You need to get a few legal things in order first, the first one being an Employer Identification Number. You can find where to apply for one of those here. An EIN is the number that the IRS gives you to identify your business. Think of it as this: a social security number for your company, except you use it on all documents and forms when it comes to paying your employees.
4. Once you’ve got your EIN, it is time to prepare for all of your tax requirements. They differ from state to state, so it is important to seek some professional advice in your area. Some rules to keep in mind are..
   • You will need to file form W-2 to report wages for each employee that you have.
   • You must deposit and report unemployment taxes.
   • Employers have to withhold taxes from your employees according to the IRS withholding tables.
   • You must deposit your withholdings.
   • You also need to withhold part of Social Security and Medicare taxes from each employees’ wages and pay a matching amount yourself.
   • Employers need to withhold 0.9% Additional Medicare Tax on wages if the employee exceeds the threshold amount. This is where the costs of hiring really seem to add up. Your state can have certain obligations, too. That is why it is so important to contact your specific state’s Department of Labor to find out exactly what those requirements are.
5. There are a few things to do to be positive that you’re good with the law when you hire someone. When you do hire, each employee will have to fill out a W-4 and an I-9 form. A W-4 will provide information on how much income tax to withhold from their checks. An I-9 will assure you that they are authorized to work in the United States.
6. Decide how to handle your payroll. It is never as simple as writing a check. You need to make sure that you have a way for your employees to clock in and out, that you pay them on time, and give them a good experience, too. Choosing to outsource your payroll to a provider like SPB can help with that. At SPB, we train both you and your employees in Gusto, our payroll software of choice. We even run your first payroll with you! We choose to partner with Gusto because they make it easy for your employees to see their paystubs at-hand, fill out the required forms (W-4,I-9), track time, and so much more.

After you follow these 6 steps, you’re ready to hire! Now that you have finished all of the prep work, it is time to look for your first employee! Create a job description that attracts candidates and clearly lays out exactly what you are looking to hire for. We hope that your ideal candidate comes soon!

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We use Gusto’s one-step provisioning to assign company email addresses, create Google accounts, and so much more. It makes creating company profiles easy for us!

When provisioning apps are set up within your Gusto account, you have the option to automatically create and remove third-party app accounts for your team directly from Gusto. You can..

• Create, view, or remove your team member’s app accounts directly from Gusto.
• Set up a new hire app account quickly from the onboarding checklist.
• If one of your employee’s leaves the company, you can disable their access securely at the same time you dismiss them.

How to add a new app for your company:

1. Sign in to your Gusto admin account.
2. Go to your App directory.
3. Click Provisioning apps.
4. Select the software you wish to connect.
5. Click Connect (if your company already has an account with the software). Click Get [App Name] (if your company does not have an account yet).
6. Enter admin credentials for the app.
7. Enjoy how incredibly easy that was!

There are 63 apps that Gusto integrates with, but here are some popular examples:

• Google Workspace
• Zoom
• Asana
• Dropbox
• Microsoft 365
• Salesforce
• Trello
• Zoho

Integrating apps that you and your team use everyday with Gusto is about to be your best decision yet. What are you waiting for?

The post #TuesdayTips: How 1-Step Provisioning in Gusto Makes Onboarding New Employees the Easiest Thing Ever appeared first on Southern Payroll & Bookkeeping.

December snuck up on us and it’s the end of the year!  Have your employees double-checked that all their payroll and tax information is correct for their W2s in January? Has your human resources team checked to be sure that all the employer-reported information is correct too?

Many, if not most, that file their income tax reports will be due for a refund from the IRS and it is very important that both employee and employer information are correct in the employee’s Gusto payroll account to help them get the correct information on their W-2 for filing on time.  This is the information that you will want to double check:

1 – Is the employee’s full, legal name entered correctly in Gusto?  W2’s cannot have nicknames. 

2 – Is their mailing address correct?  When employers or Gusto mail these out, they can only go by what is in Gusto.  If an employee has moved during the year and they have not updated their home address in Gusto, the W2 will be mailed to an incorrect address and cause delays. So be proactive – have your employees verify their address information now to avoid delays later!

3 – Are all wages are accounted for?  Some employers occasionally give their employees a manual check for bonuses or other expenses. Be sure that anything paid outside of normal payroll checks is documented in Gusto before the end of the year to ensure that all taxable wages are reported correctly.

4 – Is the work location correct for all employees? In previous years, this was simply the office address. More and more, though, and especially in this post-pandemic era, many employees are working from home. If they live in a state that taxes income, this is an important distinction, especially if the employer is in one state and the employee lives in another.

5 – Are the FEIN and state account numbers noted correctly? We are all human and it is possible to enter a digit wrongly when typing. Wrong information can cause costly delays though so double-check to be sure that this information is right.

Checking this information pro-actively helps you, as the employer, to report necessary information to the IRS in a timely fashion. It also shows employees that you are looking out for their interests. Win-win!

For more helpful information about preparing W2s and other tax topics, visit the IRS here. And, of course, if you have any questions about verifying information in Gusto, or any other payroll-related matters, remember… we are always only a phone call away and our payroll team will be happy to help!

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IS YOUR BUSINESS READY FOR ANYTHING?

For most business owners, typical days in the office or at the jobsite consist of blocking off time for replying to emails, returning phone calls, and attending meetings scheduled for the day. You know, smooth and routine, always predictable…. SAID NO BUSINESS OWNER EVER.

There is no such thing as “routine” in the life of a business owner. The tough reality for all business owners is that there will come times when “business as usual” is interrupted with circumstances that you did not plan for, situations that are out of your control.

One such event occurred in Chattanooga in 2020. A catastrophic tornado touched down and destroyed both homes and businesses in the East Brainerd area of the city.

Suddenly, life was upended and businesses in the area were forced to close for repairs/remodeling. While insurance covered many of the damages, there were still out-of-pocket expenses needed to get many of the affected businesses up and running again.

Natural disasters are not always to blame for unexpected expenses, though. What do you do when equipment breaks down? Are you prepared for the key employee that suddenly turns in their 2-weeks’ notice? How about a sudden supply chain backlog?

Sadly, these unexpected expenses can be very stressful and financially devastating if you are not prepared. For many small business owners, it often feels as though making payroll and the timely payment of bills leaves their bank account near zero until the next client payment comes through.

The solution to saving your sanity, however, is to be ready.

One way for business owners to be ready is to create a savings account and develop a pattern of setting aside money on a regular basis. When needed, it is there for you. To effectively plan ahead, set up a line item in your budget so that money is available for when these unexpected events occur. Be READY for anything, so that nothing will ever slow you down.

If we can assist your business with future-proofing finances, give us a call at (423)207-2497!

The post #TuesdayTips: 1 Way to be Always Ready for Anything appeared first on Southern Payroll & Bookkeeping.