How Seasonal Employees Affect Payroll

Hiring seasonal employees can be an excellent idea for any business. It can help fill in the gaps during a slower time of year and help business owners cut costly hours from their payroll while focusing on more profitable seasons. Seasonal employees can also be excellent additions to a business when trying to comply with labor laws and provide health benefits while minimizing costs. 

Hiring these short-term employees is not without its risks, though. Some employers may need to make changes to their payroll to accommodate the fluctuations in staff during certain times of the year. For example, if you employ seasonal workers during your slow seasons, this can inflate your employee count, which might mean you will have to start paying quarterly taxes instead of monthly. Let’ take a closer look at how seasonal employees can affect your Daytona Beach business’s payroll. 

Seasonal Employees and Federal Laws 

In short, seasonal employees are temporary workers that you bring in only during parts of the year. You may hire them to help with the holiday rush, such as online sales, or if you operate a seasonal business such as a summer camp or ski resort. The most significant benefit to hiring seasonal employees is that you no longer have to continue to pay extra employees once the rush or holiday season has ended. 

According to the Fair Labor Standards Act, seasonal employees have the same rights as full-time and part-time employees. This means that seasonal workers must receive hourly pay of at least minimum wage. You must also compensate them for their overtime work; even though seasonal workers may only be with your business for a short period, you still need to establish a regular pay period with them, whether that be weekly, bi-weekly or monthly. 

Withholdings such as taxes must also be made before paying your seasonal employees. Depending on how frequently your business is open throughout the year, this will determine when you will have to send in your tax forms. 

Effects on Payroll 

Since seasonal employees have the same rights as full and part-time employees, you must make sure that you include them in your payroll management. Failure to include these short-term hires on your payroll could get you into trouble with the IRS when tax season comes.

It makes sense that many business owners would rather pay their seasonal workers under the table, meaning paying them secretly. Even though this might seem like an easy solution to the added paperwork, it’s just another way that the IRS could fine you with potential penalties. In the end, it is not worth the headache and fines from the IRS.  

If you are looking to hire new short-term employees for the holidays or high-demand seasons, it may be best to look into seasonal employees. At Vision HR, we are here to help you with all of your payroll needs, especially when adding seasonal employees to your payroll management. Give us a call today and see how our exceptional services can help your business. 

Payroll: Contractors and Subcontractors

If you are a business owner, you probably have thought about hiring a contractor or a subcontractor to help you with your daily business operations. Both have vital roles, but they are not the same from a legal standpoint. Understanding the differences between contractors and subcontractors is very important for payroll management. 

Payroll can be tricky, especially if it’s your first-time handling employee payroll. The consequences of misclassifying an employee as a contractor or subcontractor can be enormous, including significant fines and lawsuits against you. Therefore, it is essential to understand which employees fall under which type of employment relationship. Join us today to discuss the differences between contractors and subcontractors and how they can affect your business’s payroll. 

Contractor

A contractor is either another company or a person who owns their own business. Typically, you would hire a contractor to complete a set of tasks that you or your current employees might not have the skill set to accomplish. In exchange for a completed job, you will then pay the contractor the agreed-upon amount, and each of you will go on your separate ways. Hiring a contractor might include a business that does:

• marketing
• website design 
• content creation 
• business branding 

 

Although the contractor is working on completing a set of tasks that need to be finished, they are not your employee. Once you have signed the contract to begin work, the contractor will allocate their time to complete the task on the agreed-upon time frame, and in the end, you will pay them for the amount stated within the contract. 

Subcontractor

Now, this is where things can get confusing. A subcontractor is also a business owner. Subcontractors have a set of skills to complete different tasks and projects to help the contractor complete the overall project that you have designated to them. The best way to think about this is that the contractor oversees the project’s completion and coordinates their skills and other tasks to subcontractors to complete the whole project. 

Let’s break this down even further. If your company requires content creation, you might reach out to a contractor specializing in different types of content creation. Once you have signed the contract and the project begins, the contractor might hire a few subcontractors with a specific set of skills to complete, social media captions, blogs, website copy, and much more. Hiring different subcontractors allows the contractor to oversee each job and effectively manage the project to complete it as a whole. It is also important to note that the subcontractor is not your employee.  

How Do They Affect Your Payroll?

The biggest question you may have when hiring either a contractor or subcontractor is how will this affect my payroll? In most cases, you will not be paying your new hire an hourly rate; instead, it will be one flat fee discussed within the contract. Because of this, your payroll will not be affected. 

Since they are not your employees, you will not be responsible for providing them with benefits, such as health insurance, sick time, or vacation. The contractors and subcontractors will be responsible for their benefits and will also have to pay their taxes at the end of each year. 

Contractor and Subcontractor Conclusion

As a business owner hiring a contractor or subcontractor can help alleviate some of the daily stress you may experience. If you need help to complete a specific task or project but don’t have the skillset, then these new and easy hires might be just the thing. Luckily for you, there is little to no effect on your payroll. However, if you are a business owner in the Ormond Beach area and are looking for a payroll service that can help you prevent potential confusion, look no further. Call us today at Vision HR to help you with all of your payroll needs. 

Choosing the Best Payroll Frequency for Your Ormond Beach Business

As a business owner, you need to run payroll regularly to ensure that you are paying your employees their earned wages. This article will show you what payroll frequency is and how to determine what the best option may be for your Ormond Beach business.

What is Payroll Frequency?

The basics behind payroll frequency are the amount of time between when an employee is paid. It will determine when they receive their wages and how often. There are 4 different types of payroll frequency that you can use in your business, which include:

• weekly
• bi-weekly
• semimonthly
• monthly

 

Let’s take this a step further and break down each frequency to show its pros and cons. The other considerations you must be aware of when choosing the perfect payment frequency for your business.

Weekly

Did you know that this type of pay frequency is the second most common form? When you choose to pay your employees weekly, they will receive their paycheck at the end of every week, typically on a Friday. Since the paychecks are more frequent, they generally are less money. However, many employees enjoy receiving a weekly paycheck to better handle their money and pay for bills at the end of each week.

Bi-weekly

With this form of payment, an employee will receive their paycheck every other week. For them, this means that there will be more money but less frequent. Bi-weekly payments are the most common payroll frequency. For many people who fear monthly paychecks, this can be a great middle-ground between weekly and monthly.

Semimonthly

This frequency can be confusing in comparison to bi-weekly payroll. However, the most significant difference is that instead of receiving a paycheck every other week, your employee will only receive a paycheck 2 weeks out of the month. Your employee will only have 24 total paychecks instead of 26 in the entire year compared to bi-weekly.

Monthly

Last but not least, we have monthly. For most people, being paid monthly can be challenging; the main reason being is because of the long periods without a paycheck. As an employee, it’s essential to know how to properly handle these large paychecks to ensure you don’t spend it all in one place. Because of these reasons, it is the least common pay frequency used in most businesses.

Other Considerations

Now that we have discussed the 4 different payroll frequencies, it’s also important to note that there are a few other factors that should come into determining which one you choose, such as:

• legal requirements
• the size of your business
• employee classification
• payroll cost

 

Does payroll seem like an impossible task to manage while being a business owner too? Not to worry, contact our professionals here at Vision HR. Our payroll service will help you focus more on running your Ormond Beach business.

Calculating Overtime for Payroll

When calculating payroll, it’s essential to make sure you compensate your salaried employees for any overtime pay. Under the Fair Labor Standards Act, also known as FLSA, salaried workers must receive overtime compensation for work that exceeds a 40-hour workweek.

Overtime must be accounted for when completing payroll to ensure the proper taxes are taken out of the wages and that the employee was paid for their extra time. Let’s take a closer look into the importance of understanding what overtime is and how to calculate it.

What is Overtime?

You may be wondering what the criteria are for overtime? In simple terms, overtime is considered to be any hours worked over the standard 40-hour week. The requirements also state that only employees working for a salary rate can receive overtime.

For example, if your employee works their typical 40 hours plus an additional 5 hours, amounting to 45 hours in total for a workweek, that extra 5 hours will be counted as overtime pay. You can also have overtime pay starts after a lower number of hours, such as 36 instead of 40.

Why It’s Essential to Get It Right?

Understanding how over time can affect your payroll tasks is essential. Not paying your employees the proper compensation if they qualify could get you into a lot of trouble with the government and your employees.

How to Calculate It?

Calculating overtime is just as easy as hourly wages. Typically, the overtime rate is time and a half. This means that if your employee makes $15 an hour, their overtime pay would be $22.50. Now, let’s say that your employee worked 40 hours at $15 an hour; their weekly salary would be $600 before taxes. If they worked an additional 5 hours, their overtime pay would amount to $112.50, which would be added to their usual salary creating a total of $712.50 before taxes.

Other Factors to Consider

There are a few things to consider when figuring out overtime pay. The first is that different states have specific laws regarding overtime pay that you should be aware of. Another thing to be mindful of is the pay frequency in which your employees are paid. Overtime is calculated weekly. Therefore, if you pay your employees on a bi-weekly or monthly basis, you will need to find their weekly salary first by doing a little extra math. After that extra step, you’ll easily be able to figure out their overtime pay and compensate them accordingly.

As a business owner, you should always make sure you are doing right by the law and your employees. Following the criteria for overtime will make payroll much easier and less stressful. Professional payroll services take the guess-work out of having to worry about overtime compensation. Turn to our team at Vision HR to help your Holly Hill business with all your payroll needs; Contact us today to get started.

How to Fix 3 Common Payroll Mistakes

Mistakes on your business’ payroll can get you into trouble with the IRS. Your intentions may be in the right place, but even a simple error submitted for review can come with many penalties and fines.

Don’t panic just yet! There is good news. Today we will be discussing 3 common payroll mistakes and how you can make sure they don’t happen to you.

Payroll Mistake 1: Late Payroll

Within every state, there are requirements for payroll frequency. This means that you must pay your employees on a specific frequency, either monthly, weekly, biweekly, etc. Failure to pay on time can mean two things.

First, not paying your employees on time can more than likely cause them to lose trust in you. It can also cause issues considering many employees rely on their paychecks to make bill payments and survive. Secondly, this action could make you non-compliant with the regulations set in place by your state, which can, in turn, get you into trouble.

To ensure that this does not happen to you, pick the pay frequency that works for you and your employees within your state regulations. Next, set reminders to make sure the task gets completed on time. Make sure to account for the processing time as well; this will also help ensure your employees get paid on the right day.

Payroll Mistake 2: Paying the Wrong Tax Rates

The government can change different aspects of payroll as they see fit. Tax rates are one of those things that change periodically. If you are not aware of the current tax rates, this could make payroll even more complicated. Taxes that typically have yearly updates include:

• Social Security tax
• Medicare tax
• State income tax
• State unemployment insurance tax
• Local income tax
• Federal income tax

 

Paying the wrong rates could put you in a situation where you will become responsible for paying any of the owed taxes, penalties, and interest charges, so it’s crucial to stay up-to-date on any changes that occur.

Payroll Mistake 3: Wrongfully Classifying Exempt Workers

When your employees fill out their W-4 form, they will fall into two categories; Exempt or nonexempt. There are regulations made under the Fair Labor Standards Act (FLSA), which gives employers a guideline on classifying their employees. The FLSA requires that exempt employees must meet all three of the following criteria to be classified as exempt, which are as follows:

1. The employee must make $35,568 annually or $684 per week
2. The employee is paid on a salary basis
3. The employee’s job duties fall into one of the three categories; executive job duties, administrative job duties, and professional job duties

 

On the other hand, we have nonexempt employees. The FLSA protects these employees and ensures that they must be paid the federal minimum wage and receive overtime pay for hours worked over 40 hours a week. Always check with your Wage and Hour District Office to determine your state’s minimum wage laws and overtime pay.

Failure to improperly classify your employees could mean you would need to pay them back wages from any overtime that they missed out on because of your mistake.

It’s human nature to make mistakes; we are not perfect and slip up now and then. No matter how many times you review documentation and numbers, there is always room for errors. Instead of adding to the payroll stress, allow us at Vision HR to relieve the stress that payroll brings. Our team of professionals has years of experience and are ready to help your Deland business with all of your payroll needs; contact us today!

Payroll Terms Business Owners Need to Know

As a business owner, you probably already have so much on your plate. Between daily activities, expenses, and so much more, it can be hard to understand every aspect of your business, especially payroll. Whether you handle these services yourself or hire someone else to get the job done, you should know some of the most common payroll terms; join us today as we take a closer look.

1: Accrue

This verb means to build up or accumulate over time. In short, this term involves all forms of compensation owed to the employee but has not been paid to them as of yet. The main aspects of this include:

• wages
• commissions
• salaries
• bonuses
• payroll taxes

2: Deductions

Payroll deductions are necessary to note because there are two different forms of deductions: mandated and voluntary. The employer’s responsibility is to withhold these deductions from every employee’s paycheck, including commissions and bonuses. If these are not withheld, the employer will be liable.

Government-mandated deductions include things such as Medicare taxes, Social Security taxes, and federal income taxes. Child support payments can be withheld from the employee’s paycheck or garnished if there is a court order. Voluntary deductions include 401(k) plans, insurance plans, and possibly union or uniform dues.

3: Employee’s Withholding Allowance Certificate AKA W-4

Even if you are a new business owner, you more than likely already know what a W-4 form is if you have ever worked as an employee. This form will tell your employer how much federal income tax to withhold from your paycheck. Typically, most employers give this form to new employees before they begin working. It’s important to note that you will need to fill out another W-4 form if you have any significant life changes such as:

• married
• had a child
• divorced
• started a side hustle
• paid too little or too much in taxes

 

The IRS usually recommends that every employee fill out a W-4 form at the beginning of each calendar year to ensure you pay the right amount of taxes. However, if everything remains the same, there may be no need to do so.

4: Tax Exempt

In some cases, an employee can be tax-exempt, which in short means that they are not going to have federal income taxes withheld from them on their paycheck. There are two situations that must apply to the employee for them to claim an exemption on their W-4 form, which are:

1. Within the previous year, the employee had a right to a refund on their federal income taxes because they had no tax liability
2. In the current year, the employee expects and refund of the federal tax that was withheld

5: Gross Pay

Gross pay is calculated by totaling up an employee’s earnings throughout a given period before any deductions. A simple equation to figure out gross pay is Gross Pay = Net Pay + Taxes and Deductions.

6: Income Tax

Did you know that income tax is one of the most significant revenue sources for the United States’ federal government? Individual employee income taxes fall into three categories: federal, state, and local income tax. Depending on what state you live in, you may only be responsible for federal income tax.

7: Net Pay

Net pay is essential because this is the total amount of money the employee will receive on a typical paycheck. This is calculated by taking their gross pay and subtracting any taxes and deductions.

8: Social Security

Social Security is considered a pay-as-you-go program. When you have a job that takes taxes out of your paycheck, you automatically get social security taxes to take out as well. This money is accumulated by the government and paid back to you every month after you retire. However, if you pass away, this money will be sent to any beneficiaries you may have, such as any surviving spouse or children.

9: Sick Pay

This is a benefit that you, as an owner, can offer your employees if you choose to do so. It’s important to note that there is no federal law requiring business owners to provide this type of benefit to their employees. If you decide to offer sick pay for your employees, make sure to include your compensation for sick pay within the policy since there are a few different ways that you can provide this type of payment.

You can also offer third-party sick pay instead where compensation comes from an insurance company. That insurance company must cover your business to provide this form of compensation. You should note that payment is only taxable in the first six months, and then the employee becomes exempt from taxes on sick pay compensation after the seventh month and so on.

10: Withholding

This term goes along with your employee’s W-4 forms. Withholdings are the portion of an employee’s paycheck directed to federal, state, and local tax collections. To determine the amount of withholdings on an employee’s paycheck, they must fill out the W-4 form. Withholdings can decrease the amount of taxes employees pay at the end of the year. However, if an employer does not withhold enough taxes, it may lead to the employee owing money at the end of the year.

As a business owner, it’s essential to be informed about all aspects of your business, even if it’s something that you do not handle. Payroll can be complicated to understand; however, you’ll understand it a lot better once you know these simple standard payroll terms. Here at Vision HR, we are dedicated to helping your Palm Coast business with our exceptional payroll and timekeeping services; get in touch with us today to learn more!

5 Payroll Myths Debunked

No matter what your misconceptions are about payroll, it’s essential to get your facts straight before you end up with a massive mess on your hands. The consequences of your mistakes and false beliefs can get you and your business into a lot of trouble.

We’ve debunked 5 common payroll myths that will help put your mind at ease, and give you the facts you deserve, read on to learn more!

Myth 1: It’s Easy to Do in-house Payroll if You Are a Small Business

No matter if your business is big or small, every business owner shares the same struggles and goals; You want to focus on what matters most by saving time where you can. In a way, payroll for small businesses can look simple from the outside. You have fewer employees, which means less information, and you believe that means you will have to spend less time on payroll.

However, suppose you go into this situation with that mindset. In that case, you could be setting yourself up for a whole list of errors and mistakes, especially if you are not aware of the most current government regulations. The IRS doesn’t care how big your business is; what they do care about is the accuracy of your reports.

Myth 2: Seasonal Hires Can Be Paid Under the Table

A seasonal employee works for a business over a short period to help relieve the workload. Typically, we see this happen around Christmas, where companies put their hiring signs up and ask for help to handle the new rush of customers.

Let’ talk about pay for seasonal workers. At first, you might think that just because these are temporary employees, it doesn’t make sense to add them to your payroll for taxes. Many good intending business owners believe that this will make things easier for them and the employees. Unfortunately, this situation can come with a host of consequences, causing an even bigger problem. You should treat seasonal workers like any other worker and always add to your payroll. This will save you from issues such as fair pay, problems with the IRS, and much more.

Myth 3: We Are Experienced in Payroll and Don’t Need Help

No matter how many years of payroll experience you have, you’re no match for the ever-changing regulations that the government makes. If you’re not caught up with all the right information, you could be setting yourself up for any mistakes along the way. One simple mistake could cost you significant penalties and fines.

Myth 4: in-house Payroll Is Cheaper

If you think about the bigger picture, you’ll know that in-house payroll is not always cheaper. Let’s say, for instance, you accidentally make a mistake on the documentation. These fines can quickly add up, and the IRS will want you to pay these fines promptly.

In-house payroll can take time away from what matters in your business. If you have very few employees and need to manage your store, taking time out to do payroll can hurt business sales, productivity, and much more.

Myth 5: Outsourcing Payroll Is Too Much of a Hassle

Finding the right payroll services for your business is not as hard as it may seem. Today there are experts all over the country offering quality services to companies in need. Once you find your perfect match, all of the work gets taken over by professionals with years of experience in the field.

All you need to do is supply them with the correct information, meet deadlines, and have an open communication line. In the end, outsourcing your payroll is going to save you from wasting your precious time.

Now that we have debunked the most common payroll myths, we hope you have understood how much payroll services can benefit your business. At Vision HR, we are here to help make running your St. Augustine business even more manageable. If you’re interested in our payroll services, contact us, and see how we can begin helping you today!

Small Business and Payroll Services: How We Can Help Your Jacksonville Business

As a small business owner, you are probably already juggling so many different tasks on a day to day basis. It can feel overwhelming trying to handle everything on your own without help. Finding the time to focus on an essential aspect of your business, such as payroll, can be difficult with your busy schedule. You are taking away from your ability to focus on what matters most. Instead, turn to the payroll experts and get back to growing your small business.

If you’re on the fence about small business payroll services, let’s discuss a few ways that our professionals here at Vision HR can help you.

Government Compliance

Government compliance is a big part of payroll. There is no room for mistakes or mishaps on essential documents. Not only can those mistakes get you in trouble with the IRS, but there could be heavy penalties and fines. As a small business owner, you don’t want to be stuck paying a fine just because of one simple mistake.

Keeping up with government regulations and compliances can feel impossible when you are putting all your energy into growing your business. When you hire payroll service professionals, you get a team that understands the importance of keeping up with ever-changing government regulations. Mistakes will no longer be on your hands, and you can feel relief in knowing that your payroll is being done by the books.

Security

In today’s world, it’s essential to take care of valuable information regarding your identity. When you handle in-house payroll, you obtain information regarding employee’s names, home addresses, bank information, and much more. This information can be a gold mine for hackers and identity thieves just waiting to get their hands on it.

Improper handling of this information on unsecured networks can leave a door open for those looking to gain easy access to personal information. Even if you believe your networks are secured and data is safe, you can never be too sure. When you use professional small business payroll services, you can relax knowing that your employee’s information is secure.

Save Time

With so much going on throughout the day, week, month, and years payroll services are most likely to be placed on the back burner until the day comes when you have to face that daunting task. Luckily, it doesn’t have to be like that.

When you choose to hire professionals for all of your payroll needs, you get to save precious time and focus on what is important to you as a business owner—for example, growing your business, creating new products, or revamping your storefront.

Professional small business payroll services can help your Jacksonville business thrive while saving you time to focus on what truly matters. At Vision HR, we are a team of experienced professionals who have worked with big and small companies. Get in touch with us today to see how we can help your small business.

Why Paid Parental Leave Matters

The needs of your employees are always changing. No two people are the same. Everybody has different goals in life so, naturally, you’ll run into different requests depending on the employee. 

It’s important to ensure your workplace has paid time off policies that reflect the challenges of your workforce. Ten, fifteen years ago, the idea of “work-life balance” was pretty unheard of. Now, it’s a necessity, and it’s important for your business to work this changing of the times.

One important step in this process is developing a company policy on parental leave. It needs to be positive, needs to consider the needs of your employee, and it should be paid. Parental leave has made its way into the mainstream and is, largely, just the way we do things now. A Mercer study showed how more than two-fifths of surveyees reported offering paid parental leave to not only the birthing parent, but the non-birthing parent as well.

That’s a lot of pressure to adjust your parental leave policy. But there’s more to it than it just being popular. Join us, today, for four great reasons to review your Ormond Beach business’ parental leave policy.

Attracting Talent

It’s a sign of a solid operation when word gets out that it’s adapting progressive policies with its employees. It’s something people talk about. And, assuming your goal is attracting talented individuals to your business, why wouldn’t you want the news to spread?

When you don’t want someone filling a desk or standing by, it pays to find quality candidates during recruiting. Paid free parental leave is a strong bargaining chip, especially for newly-weds, but really for any number of different people. Remember: if you can provide when it matters most, people will internalize that and want to work for you.

Whether your business is fielding make or female candidates, parental leave is one of those benefits that signs the deal so you can compete with other businesses in your industry. Comprehensive support packages for employees are becoming the new norm, and not offering them will leave you in the dust. 

Holding Onto Talent

By this stage, it’s no secret that business turnover can be costly. Losing an employee, then scouring the job boards for a new one, interviewing them, negotiating their salary, and onboarding them all cost money. Not only that, but they dig into your operational time and resources, which could be spent generating income in other parts of your business.

Transitioning from training to the workplace itself takes effort, and so does transitioning from being a working person to being a parent. The fact that your business has factored that in with a comprehensive parental leave policy will show your employees that you consider their needs as well as your own. Much like any other relationship, this kind of thoughtfulness will go a long way toward retaining these employees.

Digital media giants, BuzzFeed, have reported increased employee retention by simply offering 18-week paid leaves to primary caregivers and 6 weeks for secondary.  Parents also have access to counseling resources during their transition. With this simple change, the company saw an increase to 95% in their retention rates. For reference, the national average at the time was about 57%. 

Maintaining Workplace Equality

In the modern workplace, it’s more important than ever to make sure you’re considering the equality and fairness of your operation. We’ve come a long way as a society and minority representatives from every corner of the world are speaking up to have their say.

Which brings us to a simple question: why is it that businesses have, traditionally, offered mothers paid maternity leave but not given the same option to fathers? Until recently, this was just the norm, but it does imply that mothers have to be primary caregivers and fathers will always be known as “just” the breadwinner.

If you can offer a paid maternity option that even just covers paid maternity leave to both parents (like Buzzfeed did), you break down this idea of inequality in your workforce. It doesn’t even necessarily need to be exactly the same coverage, as we’ve seen above – so long as it’s a meaningful amount, you’re already doing your part.

Of course, the goal is equality in the workplace, and that will eventually come down to offering the same duration of paid leave to both mothers and fathers. If you can do this, you break down the idea of mothers and fathers being “different” and give your employees what they want: more time to spend with their families. This isn’t just a kind thing to do, either – it’s a measured approach that shows your employees you’ve really considered your operation and are working to make it better.

Creating A Positive Culture

When we factor in all of the points above, we start to see an image emerge. Namely, a business with a positive working culture. The kind of place that people want to work. Where recruitment is strong and the candidates who start have a lot to offer the work being done. Where older employees stick around because they’ve always been treated properly. And where the gender gap continues to be closed with policies that factor in everyone, man, woman or undefined. 

The benefits of a positive business culture can’t be overstated. Team projects are carried out more efficiently, with everyone “on the same page”. Retention and new hiring are both complete breezes. And the level and consistency of the work is a near-guarantee because, hey, you know all of the people doing the work. 

And parental leave plays its own part in the creation of this kind of culture. A good policy encourages parents to spend time with their families, leaving them feeling more fulfilled. Employees, in turn, bring this healthy outlook into the workplace, the knock-on effect being a stronger workforce, overall.

Parental Leave: Are You Doing Everything You Can?

If it’s been a while since you reviewed your parental leave policies, it may be time to update them. Remember that you’re dealing with employees whose lives are evolving around them every day. They’re going to need your help, and the more considerate you are, the more incentive they’ll have to be loyal. 

Looking for more insights into your payroll process? Need someone to take the whole process off your hands? At Vision HR, we offer payroll administration to help you navigate the tricky waters of fast-changing tax laws, company-specific needs, and shifting administrative requirements. Get in touch with us today to find out more about how we can help you manage your Ormond Beach business processes.

PPP Loan Forgiveness Q&A

In 2020, businesses across the country got a crash course in emergency business loans as COVID-19 descended on us. As finances took major hits, businesses in every sector began feeling the pinch. Luckily for them, Luckily for them, three small letters were on their way to help out.

PPP loans are one of the main thrusts of the US government’s CARES plan. They serve a very particular purpose: helping businesses mitigate the negative impact of COVID-19. Which is great but, like any other loan, there will come a time when you’ll need to pay it back.

Only, in many cases, that actually isn’t an issue for PPP loan holders. Join us, today, for part one of our two-part look into the process of PPP loan forgiveness and how you can apply for your Altamonte Springs business.

Have Applications For Loan Forgiveness Already Opened?

They have! The Small Business Administration (SBA) has officially begun accepting applications for PPP loan forgiveness. Good news for small businesses, but there is one stop you’ll need to make before you can get your application in for consideration. Specifically, business owners will need to submit applications to their lenders, first. With that out of the way, however, we can move on to the application itself.

PPP Loan Forgiveness: The Conditions

Starting with the terms of the PPP, itself, we understand that the loan amounts granted to businesses are based on their 2019 average monthly payroll costs. At the time of release, applicants were eligible for up to over twice that amount, to aid in covering eight weeks’ worth of payroll expenses.

Once granted, the PPC loan’s funds can be used for any of the following purposes:

• Payroll: The most obvious purpose for a PPP loan, businesses can use this money to cover salaries, vacations, family expenses, medical costs and sick leave, and health benefits.
• Rent and Interest on Mortgages: For mortgages signed before February 15, 2020, this loan can be used to pay off this rent and to keep mortgage interest from overwhelming you.  
• Business Utilities: So long as the business service in question started before February 15, 2020, PPP loans are perfectly fine for paying off these expenses.

Since the confirmation of loan forgiveness for PPC loans, these stipulations are all eligible for forgiveness. That means, with the right submission, you could be completely forgiven for these expenses. 

It’s important to consider some of the following conditions, as well:

24 Week Coverage

The expenses eligible for forgiveness include anything incurred over 24 weeks, commencing the day of the first payment by your lender. This date and the date of your loan agreement aren’t necessarily always going to be the same date.

You won’t need to adjust your payroll calendar, as any payroll your employees incurred in the 24 weeks will also be eligible, even where pay dates fall outside of the eight week period. Expenses stop being eligible after the December 31st final deadline. For loans disbursed on or after July 16th, the implication here is that you won’t have the full 24 weeks to take advantage of. For loans before June 5th, the 8-week period is still a viable option.

Wondering whether the 8 week or 24 week covered period makes more sense for you? The consideration is whether you’re self-employed and receiving the owner compensation benefit or if you have the eligible expenses you would need to pay off the loan. 

60/40

In order to qualify for loan forgiveness, you’ll also need to be able to show at least 60% of your loan being used for the purposes of payroll. Keep in mind, this doesn’t include independent contractor payments. 

Forgivable amounts with regard to PPP loans will proportionally increase based on the amount being spent on payrolls. This amount goes up to the full amount of the total loan.

The Needs of Your Personnel

Next on your list will be maintaining the number of employees reflected in your payroll. Not sure whether you’ve met this requirement? You can check this, using a fairly simple formula:

1. Determine your average number of full-time equivalent employees for the 8-week period following your initial loan disbursement.
2. Generate the same data from February 15th, 2019 to June 30th, 2019.
3. Determine the same from January 1st, 2020 to February 29th, 2020.

Divide your 1st number from the list above by your 2nd number. Then divide the first by the third. Take the largest of these two numbers and, if it is equal to or greater than 1, you’re in good shape! Anything less, and you’ve failed to keep your template. Your forgivable expenses will be adjusted. 

One thing to keep in mind is that, if you are a seasonal employer, you will need to divide 1 by 2.

Employee Rehire Exemptions

For employees who were brought on as of February 15, 2020 and either let go or placed on leave, rehiring could be a complicated issue once the company is in a place to reinstate them. If the employee should choose to decline your reemployment offer, there are ways to exclude them while still calculating forgiveness.

In order to qualify, you’ll need to hit the following notes:

• a written offer to rehire in good faith
• offering to rehire for the same salary and number of hours as before their firing
• verified documentation of the employee’s rejection of your offer

In addition, if any of these conditions apply to your situation, they may still qualify for the exemption:

• firing for a worthy cause
• voluntary resignation
• successful voluntary application for a reduction in hours

In applying for this exemption, you may be required to prove you weren’t able to hire employees with similar qualifications for the vacant position. You may also have to prove that you were unable to return to standard business operation levels, as a result of security concerns. 

Lastly, it’s worth noting that employees who decline offers for re-employment are also unlikely to be eligible to receive ongoing unemployment benefits.

Payment Requirements

In cases where the employee’s pay for the 24 week period amounts to less than 75% of their pay in the most recent quarter of their employment, the eligible forgiveness amount is reduced. This reduction amounts to the difference between their current pay and 75% of the original pay amount. 

Rehiring Grace Period

When it comes to rehiring, businesses can bring any staff who have been laid off or forced into leave back onboard. They are also allowed to reinstate any pay that was lowered by over 25% to match the requirements of the discharge, provided those changes were the result of COVID-19 from February 15th and April 26th. In both cases, the business owner would have until December 31 to do so.

Looking for more insights into managing your Altamonte Springs office payroll process? Visit Vision HR today to find our more about our extensive HR offerings, today. And stay tuned for part two of this article: we’ve got so much more to get into!