Transcript Document

Payroll, Benefits, Retirement and Insurance
Critical Information and Valuable Insights for
Business Owners and HR Executives
Before we get started…
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Today’s presentation slides can be downloaded at
www.wolfandco.com/news/webinar_library
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The session will last about an hour, and we’ll then have time
for Q & A.
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Our audience will be muted during the session.
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Please send your questions in using the “Questions Box”
located on the webinar’s control panel.
Meet Our Presenters
Michael Young
CEO & Founder, ConnectPay Payroll Services
Kevin Keyo
Employee Benefit Specialist, Northwestern Benefit Associates
Drew Schildwachter
Payroll Specialist and Business Consultant, ConnectPay Payroll
Services
Margery Piercey, CPA, CGMA
Member of the Firm, Wolf & Company
Your Takeaway Today……
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10 x 10 - Introduce you to business processing concepts
around Payroll, Insurance, and Retirement Planning, capable of
driving $10K in annual recurring savings for every 10 staff in your
business…..at the same time, increasing your awareness of
accelerating local and national compliance requirements.
− Topics:
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Lower Your Labor Costs and Insurance Liabilities
Trends in Minimum Wage – The measurable effect on employers
Managing changes in Sick Time Pay
Smart Automation – What we call REAL HR
ACA – Still a moving target
Unique ways to solve for Retirement Planning
Lowering Your Labor Costs &
Insurance Liabilities
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The Start - Knowing when each person in
your company is actually on the job and
ready to begin work!
A Time & Attendance Evolution
still see time tracking
this way…..
What was once a simple need to track
hours in the warehouse….
Now Benefits:
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The Front Office
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Automates federally mandated
insurance calculations
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Streamlines vacation requests and
tracking
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Nails down the data needed to satisfy
virtually any DOL audit request.
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Avoid the Avoidable – He said...She said
Who controls your Payroll & Insurance Costs?
In This Scenario:
You have given your employees
the power
Salaried & Hourly
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Manual Time Tacking:
− Always rounded?
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Cost to you…..
− Excessive OT
− Increased Regular Hours
− Missed Time Off
− Matching Costs in…….
− Medicare
− Social Security
− Unemployment
− Retirement Plan Savings
− Time Off
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Compliance
− Some states require the employee
see and approve their time cards.
The Value Of Just A Few Minutes Each Day…
The Cost Of Staff Arriving Late Or Leaving Early
Lost Wages Per Day (for 1 Employee)
Hourly Wage
$ 15.00
Arrival Time
Statutory Matching Expense Per Hour
Social Security
Medicare
State Unemployment
Workers Compensation
6.20%
1.45%
0.80%
0.75%
$
$
$
$
0.93
0.22
0.12
0.11
11:58 AM
2
Return from Lunch
12:03 PM
3
4:55 AM
5
$ 16.38
Total Lost Minutes
Voluntary Matching Expenses
401K
Life & Disability Insurnace
Lost Minutes
2
Depart Lunch
End of Day
Total Per Hour
8:02 AM
3.00% $ 0.45
0.15% $ 0.02
$ 16.85
Grand Total
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Statutory Annual Cost
for 1 Employee
$851.76
Total Annual Cost
for 1 Employee
$876.33
Lost Wages Per Day (for 1 Employee)
Hourly Wage
$ 30.00
Arrival Time
Statutory Matching Expense Per Hour
Social Security
Medicare
State Unemployment
Workers Compensation
6.20%
1.45%
0.80%
0.75%
$
$
$
$
1.86
0.44
0.24
0.23
11:58 AM
2
Return from Lunch
12:03 PM
3
4:55 AM
5
$ 32.76
Total Lost Minutes
Voluntary Matching Expenses
401K
Life & Disability Insurnace
Grand Total
Lost Minutes
2
Depart Lunch
End of Day
Total Per Hour
8:02 AM
3.00% $ 0.90
0.15% $ 0.05
$ 33.71
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Statutory Annual Cost
for 1 Employee
$1,703.52
Total Annual Cost
for 1 Employee
$1,752.66
The Value Of Just A Few Minutes Each Day…
The Cost Of Staff Arriving Late Or Leaving Early
Lost Wages Per Day (for 1 Employee)
Hourly Wage
$
25.00
Arrival Time
Statutory Matching Expense Per Hour
Social Security
Medicare
State Unemployment
Workers Compensation
6.20%
1.45%
0.80%
0.75%
$
$
$
$
1.55
0.36
0.20
0.19
$
27.30
Lost Minutes
2
Depart Lunch
11:58 AM
2
Return from Lunch
12:03 PM
3
4:55 AM
5
End of Day
Total Per Hour
8:02 AM
Total Lost Minutes
Voluntary Matching Expenses
401K
Life & Disability Insurnace
3.00%
0.15%
Grand Total
Value of Lost Wages Per Year
1 Employee
5 Employees
8 Employees
10 Employees
12 Employees
15 Employees
20 Employees
25 Employees
50 Employees
100 Employees
$1,460.55
$7,302.75
$11,684.40
$14,605.50
$17,526.60
$21,908.25
$29,211.00
$36,513.75
$73,027.50
$146,055.00
$
$
0.75
0.04
$
28.09
12.00
Statutory Annual Cost
for 1 Employee
$1,419.60
Total Annual Cost
for 1 Employee
$1,460.55
Value of Lost Wages Over 7 Years
1 Employee
5 Employees
8 Employees
10 Employees
12 Employees
15 Employees
20 Employees
25 Employees
50 Employees
100 Employees
$10,223.85
$51,119.25
$81,790.80
$102,238.50
$122,686.20
$153,357.75
$204,477.00
$255,596.25
$511,192.50
$1,022,385.00
I’m Separating My Employment
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I may want to believe – He Said….She Said
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I worked more hours than I did
I worked more OT than I did
I wasn’t offered appropriate benefits
I Didn’t receive the breaks I should have
I wasn’t compensated for all my vacation time
Trends in Minimum Wage –
The measurable effect on employers
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23 states increased minimum wages in 2015
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Cities and Counties setting minimums
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Massachusetts Minimum Wage $9.00 as of 1/1/2015
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$10.00 effective 1/1/2016
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$11.00 effective 1/1/2017
The trend is clear
Trends in Minimum Wage –
Who is paying minimum wage ?
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82% of small business owners surveyed pay more than
minimum wage.
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Retail, Fast food, and Hospitality dominate the 18 % in
the minimum wage group
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Nearly 44% of minimum wage workers across the
country are in the food preparation and serving
occupations, according to the Pew Research Center.
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The restaurant industry is most impacted and
particularly sensitive to minimum wage hikes
Trends in Minimum Wage –
What is the impact
A survey of business owners response:
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Shortened operating hours
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Reduced headcount through attrition
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Increased prices
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Owners picked up more responsibility
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A few closed the doors
Trends in Minimum Wage –
Tactics used by top paying retailers?
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Trader Joe’s pay average hourly wages of $13.75
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Higher wages –reduced turnover – better customer service
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Container Store pays double the average retailer
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Costco starts at $11.50 and pays $21 an hour on average –
they have low turnover –less than 6%- which saves the
company money
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Both Trader Joe’s and Costco cut costs by offering fewer
products. They cross train employees to do more tasks
Trends in Minimum Wage –
What have we seen so far
• We have seen a reduction in hours – (mostly weather
related)
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New Minimum Rate @ $9.00
− $8.50 became $9.00 not $9.50
Businesses have closed up (were already in trouble)
Trends in Minimum Wage –
Compliance requirements
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Employers must display an official poster outlining the
requirements of the FSLA
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Employers must keep employee time and pay records
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Employers must pay the higher of state and federal
minimum wage laws.
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Covered nonexempt employees must receive overtime
pay for hours worked over 40 per workweek
Trends in Minimum Wage –
A proactive approach
Consider the following;
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Look at your pricing, are you below market?
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Look at your product mix –especially low turning and low
margin items
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Focus on cross training and ways to reduce turnover
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Control expenses. Look at your entire budget
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Find value added items to add to your product mix
Managing changes in Sick Time
MA Employers Only
− The spirit of the new regulation – More coming on July 1st
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One Hour for every 30 worked
90 day waiting period to use – but earned time off begins on hire date
Not required to advance time
OT Exempt – Accrue at 40 hours unless outlined as fewer scheduled hours
Calendar year plan
11 or more employees, not FTE
Personal Care Attendees and Family Child Care Providers –
Employees not entitled – allowed 40 accrues unpaid hours
Use – Smallest increment allowed by employer’s payroll system.
Carry over 40 hours
Annual max 40 hours
No pay for unused time
Subsection (C)
− Mutual Consent - Absences for certain reasons – sick time may not have to be
used when hours are made up in the same or next payroll
Using more than 24 hours – Certification may be required for an absence
Advance notice should be given when an employee absence is foreseeable
Adverse actions can not be taken due to sick time off
Statute will not diminish or impair more beneficial policies
Existing plans equal or greater than the statute are not required to offer additional
time
Be sure to memo hours in payroll for salaried staff
Affordable Care Act
(ACA):
Top Employer
Questions
Employer Shared Responsibility
Rules (Pay or Play)
Small Employers
(fewer than 50 FT/FTE
employees)
• No requirement to offer coverage
Large Employers –
Applicable Large
Employers (ALE) (50+
FT/FTE employees)
• Must offer coverage to FT employees and
dependents to avoid penalties
• Coverage must be affordable and provide
minimum value
• Penalties delayed until 2015 for 100+/2016
for 50-100
Employer penalties triggered if any full-time employee
receives subsidized coverage in an Exchange
Potential Penalties
Penalty A
• Employer did not offer coverage to substantially all FT
employees and dependents (children)
• $2,000 x (all FT employees – 30 (For employers with 100+
employees in 2015 - subtract 80 employees)
Penalty B
• Employer offered coverage to substantially all FT
employees/dependents
• But not all employees, OR coverage is not affordable or
does not provide minimum value
• Not affordable = ee contribution > 9.5% of income
• $3,000 x each employee who gets subsidized coverage
(capped at Penalty A amount)
New Reporting Requirements –
Sec 6055 & 6056
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New Reporting Rules for ALEs
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1094 C & 1095 C (Sec 6056) – primary focus for most ALE
employers
− First filings take place in Q1 2016 for 2015 year
− Includes data on employer, employee & coverage offered to
employees
− Information FT & PT enrolled employees & covered
dependents if ALE is self-funded
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Due Date
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1094 B & 1095 B (Sec 6055)
− To employees – 1/31
− To the IRS – end of Feb (or end of March if filing electronically)
− Insurance Carriers
− Small Group Self-Funded Plans
2018 – Cadillac Plan Tax
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40 percent excise tax on high-cost health plans
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Based on value of employer-provided health
coverage over certain limits
− $10,200 for single coverage
− $27,500 for family coverage
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To be paid by coverage providers
− Fully insured plans = health insurer
− Self-insured plans/FSAs = plan administrator
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More guidance expected
Unique ways to solve for
Retirement Planning
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The term “401K”, like Kleenex, has become a generic and
all covering label. There are numerous ways inside and
out of IRS code section 401K to solve your company’s
retirement savings goals.
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Start with the end in mind – Know What Everyone Will
Save!!!
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Safe Harbor Plans
Managing your compliance and fiduciary liabilities
The SIMPLE IRA
The Personal IRA – It can look like a company sponsored
benefit.
Are you Automating Your Deferrals?
Your Takeaway Today……
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10K x 10 Staff – Compliance
Labor Tracking & Matching Taxes
Insurance: Reduced labor = Reduced Work Comp
Mange Audit surprises by the DOL
Minimum Wage & Sick Time Away
− Make it a winner for you
− Keep the ACA in mind
− Stay in touch with the pros as needed
− Retirement Planning
− Can come with less or no cost
− Measure risk against contributions
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Questions?
Michael Young
CEO & Founder, ConnectPay Payroll Services
[email protected]
Drew Schildwachter
Payroll Specialist and Business Consultant, ConnectPay Payroll Services
[email protected]
Kevin Keyo
Employee Benefit Specialist, Northwestern Benefit Associates
[email protected]
Margery Piercey, CPA, CGMA
Member of the Firm, Wolf & Company
[email protected]