Category: Workers Compensation

  • When “It’s Just Payroll” Becomes a $20K Fine 

    When “It’s Just Payroll” Becomes a $20K Fine 

    Many small business owners think of payroll as a back-office task—just cutting checks and sending pay slips. But payroll isn’t just about payment; it’s a compliance-heavy process with real legal consequences. 

    In 2025, regulatory bodies will crack down on payroll errors, and small businesses are the most vulnerable. A “minor” oversight in wage calculation, classification, or tax submission can easily spiral into a lawsuit, audit, or a hefty fine—often over $20,000.

    Misclassifying Employees vs. Contractors 

    One of the most common payroll mistakes is misclassifying employees as independent contractors to avoid taxes or benefits. This might save money short-term, but once flagged by labor departments, the penalties include: 

    • Back pay for overtime and benefits 
    • Employer payroll taxes 
    • Additional federal/state fines 

    Avoid this by reviewing classification laws like the IRS 20-factor test and using local labor guidelines. 

    Missing Tax Deadlines 

    Payroll involves more than just salaries—it includes federal and state tax withholdings, unemployment insurance, and social security contributions. Missing deadlines for filing forms like 941, W-2, or 1099 can trigger automatic penalties. 

    • Late W-2 filing penalty: up to $290 per form 
    • Failure to deposit payroll taxes: up to 15% interest + penalties 
    • Incorrect TIN: $50 per incorrect return 

    Protect your business by using automated payroll software that tracks due dates and files directly with tax agencies. 

    Failing to Track Overtime or Breaks 

    Most labor laws require overtime for non-exempt employees working over 40 hours a week. If you aren’t tracking hours properly or paying time-and-a-half when required, that’s considered wage theft—even if accidental. 

    • Recent lawsuits have forced small businesses to: 
    • Pay years of backdated overtime 
    • Cover legal fees for employees 
    • Face public backlash and reputation damage  

    Fix this by implementing a compliant time-tracking system and ensuring managers understand local labor laws. 

    Inaccurate Record Keeping 

    Payroll records must be kept for several years, depending on your jurisdiction. Inaccurate or missing records during an audit can make you liable—even if you were paying correctly. 

    • Fines can go up to $1,100 per missing record 
    • Businesses may be barred from government contracts 

    Stay compliant by maintaining digital records for at least 3–5 years and backing them up securely. 

    Conclusion 

    Payroll is not “just admin.” It’s a compliance function with financial and legal exposure. As your team grows and regulations evolve, outsourcing to a PEO or using payroll specialists may save you more than DIY errors ever could. 

    Reference

  • No, HR Isn’t Just for Big Companies 

    No, HR Isn’t Just for Big Companies 

    It is alarming how business owners believe they can “grow into” needing HR. But in 2025, that mindset is costing startups and SMEs real money. HR isn’t about building corporate bureaucracy—it’s about protecting your people, your time, and your business from early-stage mistakes. 

    Hiring Without Compliance = Risk 

    Startups often skip formal hiring processes, relying on referrals, rushed interviews, or handshake agreements. The problem? No offer letters, no job descriptions, and no onboarding protocols. 

    That leads to: 

    • Miscommunication of job roles 
    • Legal risks over at-will vs. contract terms 
    • Poor performance tracking and accountability 

    Solve this by establishing basic HR documentation from Day 1—even if you’re hiring your first employee. 

    No HR? Expect High Turnover 

    Small teams feel every resignation. But when employees leave because of burnout, favoritism, or poor communication, it’s often a symptom of a poor HR structure. 

    Without HR: 

    • There’s no system to handle grievances 
    • Burnout goes unnoticed 
    • Promotions feel biased or unclear 

    Protect retention by creating basic HR protocols: onboarding, reviews, feedback loops, and growth plans. 

    HR Helps Avoid Costly Employment Lawsuits 

    Wrongful termination, discrimination, harassment—these issues are not limited to large companies. A single employment claim can bankrupt a small business. 

    In the absence of HR: 

    • There are no clear policies in place 
    • There’s no paper trail to defend decisions 
    • No internal reporting systems exist 

    Avoid this by implementing handbooks, codes of conduct, and proper documentation—especially if you’re in a state with strict labor laws. 

    You’re Already Doing HR—Just Badly 

    If you’re setting salaries, negotiating work-from-home rules, or resolving team conflicts—congratulations, you’re doing HR. The real question is: are you doing it legally, consistently, and effectively? 

    A dedicated HR system or a fractional HR partner can: 

    • Standardize your hiring and reviews 
    • Handle sensitive issues confidentially 
    • Keep you compliant with local labor laws 

    Conclusion 

    HR is not about headcount—it’s about structure, protection, and long-term scale. Whether you’re a 3-person agency or a 30-person tech startup, investing in HR now prevents expensive mistakes later. Don’t wait for lawsuits, walkouts, or tax audits to start taking HR seriously. 

    Reference

  • What Your Balance Sheet Doesn’t Show: The Real Business Value of a PEO

    What Your Balance Sheet Doesn’t Show: The Real Business Value of a PEO

    Because sometimes, the biggest profits come from what you didn’t lose.  You won’t see it at first glance. 

    There’s no flashing red alert. No urgent Slack message. No budget meeting meltdown. Just a quiet, consistent drain happening behind the scenes of your growing business. It might show up in the form of a compliance fine you didn’t see coming. Or the resignation of a high  performer after one too many payroll glitches. Or worse—lawsuits, turnover, and missed opportunities stacked like hidden fees under “Operating Expenses.”  But here’s the twist: 

    Most of those losses could’ve been avoided… with the right PEO. 

    The ROI You Can’t Calculate (Until It’s Too Late) 

    When most business owners consider a PEO (Professional Employer Organization), they look at costs upfront—and often forget to assess the costs of not having one.  A PEO’s ROI is rarely found in flashy dashboards or spreadsheets.

      It’s found in the: 

    • Lawsuit that never happened 
    • Star employee who stayed because of better benefits 
    • Penalty that was prevented before it was ever filed 
    • HR fire that never reached your desk 

    What You Think You’re Paying For: 

    • Payroll processing 
    • Employee onboarding 
    • Compliance checklists 
    • Benefit access 

    What You’re Actually Getting: 

    • Legal protection 
    • Risk prevention 
    • Strategic HR planning 
    • Improved retention 
    • Business continuity 
    • Peace of mind 

    And most importantly—time back to lead, not chase admin. 

    The Cost of an HR Mistake Can Be 10x the PEO Fee 

    An EEOC violation alone can cost between $10,000 and $100,000.  Wage and hour lawsuits? Even more. According to the Society for Human Resource Management (SHRM), the average cost of just one bad hire is nearly $240,000 when your account for lost productivity, morale damage, and rehiring expenses.  A PEO minimizes those odds with structured hiring processes, HR best practices, and access to experts who live and breathe compliance. 

    Better Benefits Without Bleeding Cash 

    By co-employing your staff, PEOs give you access to benefits typically reserved for large corporations: 

    • Group health insurance 
    • 401(k) plans 
    • Mental health support 
    • Wellness programs 
    • Workers comp coverage 

    And because you’re part of a larger buying pool, you get enterprise-level coverage at SMB prices.  According to the National Association of Professional Employer Organizations (NAPEO), companies that use a PEO: 

    • Grow 7–9% faster 
    • Experience 10–14% lower employee turnover 
    • Are 50% less likely to go out of business 

    Time is the New Currency 

    Most CEOs don’t start businesses to become part-time HR managers.  But when compliance updates change weekly, employees need questions answered, and hiring surges overnight, you end up buried in tasks that take you away from growth.  A PEO handles the operational chaos, so you can focus on: 

    • Launching new services 
    • Expanding into new markets 
    • Leading your team 
    • Building client relationships 

    Talent Stays Where HR Works 

    Quiet quitting. Burnout. Lack of development. These aren’t just HR buzzwords—they’re indicators that your people feel unsupported. PEOs don’t just process paperwork. They build cultures. From onboarding design to fair policies and performance tracking, they help businesses create environments where employees want to stay—and thrive. 

    Risk Is the Hidden Killer of Growth 

    Think your business is too small to get sued? Think again.  One compliance misstep could derail everything you’ve built. And here’s the worst part: you often don’t know it’s coming until it hits.  A PEO keeps you ahead of risk with: 

    • Up-to-date legal guidance 
    • Automated filings 
    • Employee handbook developmen 
    • Investigations and conflict resolution 
    • On-demand HR counsel 

    So, What’s the Real ROI of a PEO? It’s not just savings—it’s security, scale, and strategy. In a time when regulations are shifting, talent is scarce, and competition is cutthroat, your HR setup shouldn’t just help you survive. It should fuel your ability to thrive  Thinking Beyond Cost—Thinking Growth . The smartest business owners aren’t asking “What does a PEO cost?”  They’re asking: 

    “What’s it costing me not to have one?” 

    Ready to see the hidden ROI for yourself? Let’s explore what a PEO would look like for your business. Prefer to read more success stories and insights? Browse the rest of the series here.  

    References

  • How to Avoid Costly Workers’ Comp Mistakes in 2025?

    How to Avoid Costly Workers’ Comp Mistakes in 2025?

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    Were you looking for tips online that can help avoid likely workers’ comp claims? 

    As businesses are turning back to traditional mode of operations after the pandemic, employees are being called back to the office. While this shift boosts productivity, it also increases the risk of on-site accidents.  

    Accordingly, workplace injury cases rose year-over-year, per the most recent Bureau of Labor Statistics (BLS) data. In this scenario, it is crucial to be aware of how your business can legally minimize the worker’s compensation share. To help you in this regard, here we have provided a quick guide.  

    Tips to Manage Workers’ Comp Claims Efficiently in 2025 

    A positive aspect is that most common compensation claims can be restricted by staying vigilant and proactive. Here are a few practical tips in addition that can ensure sure shot success: 

    Maintain a Dry, Clean and Clear Workspace 

    Governmental regulatory bodies hold employers responsible for providing their workers with a safe working environment. Thus, the HR department needs to ensure that office spaces are regularly cleaned. Moreover, maintaining safety and hygiene protocols in various common areas such as entryways, washrooms, and receptions is crucial.  

    Finally, the company must give its employees personal protective equipment (PPE) and implement necessary changes, like replacing air filters and adjusting lighting whenever required. 

    Conduct Safety Training Sessions for Increased Employee Awareness 

    A business should focus on generating updated training and safety policies that align with modern requirements. This ensures that both the employees and the employer are on the same page.  

    To eliminate costly compensation instances, it is essential to provide proper training whenever someone new is about to start using office equipment. Even experienced individuals should attend refresher courses occasionally to be on par with the new rules and policies.  

    Ensure Adequate Workforce is Available at all Times 

    Particularly growing businesses that often operate with limited resources, may be tempted to downsize with the intention of managing costs efficiently. However, this can result in unnecessary stress on the existing staff, potentially leading to careless mistakes.  

    In some cases, an overburdened worker may also suffer injuries due to work pressure. Hence, these situations must be mindfully avoided to prevent adverse legal and financial consequences for your company. 

    Encourage Employees to Take Frequent Breaks 

    Recent reports indicate that employees who go for occasional breaks during their shifts can showcase more productivity while at work. This is because they tend to have more energy and are therefore likely to achieve their day-to-day professional goals.  

    Do the strategies discussed above seem too overwhelming for you to implement all of a sudden?  

    If so, then instead of worrying excessively, you can partner with a Professional Employer Organization (PEO). These companies act as valuable assistants for business owners helping them assess various risks and rectifying potential issues. 

    Review the Existing Claims 

    Finally, companies need to carefully review their employee claims and double-check the issues to ensure they are accurate and valid. These actions involve checking medical bills and making sure that all employees are receiving proper medical attention for their injuries. 

    The HR department of a company must ensure that workers are receiving adequate support to recover as quickly as possible. Additionally, it falls within their responsibilities to verify the authenticity of a claim to determine whether it falls within the policy’s coverage limits. This is the most effective way of controlling workers’ compensation costs by nullifying incorrect claims. 

    Final Words 

    Efficiently taking control of your workers’ compensation costs may not happen overnight especially when you are operating in a high-risk industry. This is because first of all, you will need an expertly designed workers’ compensation policy for which you can rely on a risk management expert.  

    So, do you want to safeguard your business starting from today? Let’s chat — contact us and schedule your free consultation now! You may also visit our blog section for more free tips on how to streamline your business operations from now on.  

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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  • This Company is Paying 42% More Than They Expected for Workers’ Compensation. Are You Also Paying More Than Anticipated ?

    This Company is Paying 42% More Than They Expected for Workers’ Compensation. Are You Also Paying More Than Anticipated ?

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    Do you not know how much compensation to workers needs to be paid? Are you doubtful you are paying higher workers’ compensation to your employees? The Workers’ Compensation Act of 1923 mandates a certain amount of indemnity for injuries and damages occurring to employees at workplaces. However, the compensation amount may vary from one state to the other. The recent updates state that employers need to pay 0.93 cents for each $100 to the employees as workers’ compensation. 

    If you are paying a higher workers’ compensation to your employees than this expected amount, this blog can be helpful.

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    8 Strategies to Reduce Workers’ Compensation Expenses

    Some organizations are not aware of the average rate and end up paying higher compensation to the employees. So, here are 8 ways to reduce workers’ compensation costs for employers:

    Improve Workplace Safety

    One of the most effective ways to reduce workers’ compensation costs is by creating a safe working environment for your employees. This includes implementing safety protocols, providing safety equipment, and conducting regular safety training for your employees. By reducing the number of workplace injuries and illnesses, you can significantly lower your work compensation costs.

    Investigate the Reported Incidents

    It’s essential to investigate every incident, no matter how small. Investigating incidents can help identify potential safety hazards. It can also provide insight into how to prevent similar incidents from occurring in the future.

    Seek Assistance from a PEO (Professional Employer Organization)

    A PEO can help to reduce workers’ compensation costs by managing employee benefits, including workers’ compensation insurance. A PEO pools multiple businesses together and then negotiates better rates for workers’ compensation. Consequently, it will lower costs for individual businesses.

    Implement Return-to-Work Programs

    Return-to-work programs can reduce workers’ compensation costs by helping employees return to work after an injury or illness more quickly. These programs can include modified duties, temporary job placements, and rehabilitation services to help employees return to work as quickly and safely as possible.

    Manage Claims Effectively

    Managing work compensation includes promptly reporting and investigating claims, staying in communication with injured employees, etc. You can also work with insurance carriers to manage claims efficiently.

    Offer Flexible Work Arrangements

    Flexible work arrangements, such as remote work or part-time work, can be a cost-effective solution to workers’ compensation. For example, companies have to pay a lower salary to part-time employees than to full-time employees. Remote work eliminates the need for additional office space, supplies, and equipment. Furthermore, flexible work arrangements can improve employee satisfaction, retention, and productivity, thus leading to better overall performance and results.

    Use Contract Workers or Freelancers

    Contract workers or freelancers can be hired for short-term or project-based work. It can help save money on salaries, taxes, and benefits. Contract workers are not entitled to employee benefits, and they are responsible for paying their taxes. Thus, it can reduce the company’s financial burden. Moreover, hiring contract workers allows employers to avoid the costs of hiring and training new employees.

    Offer Non-Monetary Benefits

    Non-monetary benefits, such as health insurance, retirement plans, or paid time off, can be used as an alternative to higher salaries. These benefits can be more cost-effective than a higher salary. Moreover, some companies receive tax breaks or incentives for providing these benefits. It can also improve employee satisfaction and retention, leading to better performance and results.

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    Final Word

    Reducing work compensation costs is an ongoing effort that requires a commitment to creating a safe and healthy working environment. By implementing these strategies, you can reduce the cost of workers’ compensation while ensuring employees’ safety and well-being. If you need any assistance regarding employee management and worker compensation contact us

    Reference Links:

    https://www.klear.ai/post/reduce-workers-compensation-costs

    https://www.insperity.com/blog/workers-compensation-insurance-cost/

    https://www.hourly.io/post/5-ways-to-reduce-workers-compensation-costs

    https://www.ehstoday.com/safety/article/21912687/spiraling-out-of-control-5-ways-to-reduce-workers-compensation-claims

    https://www.investopedia.com/terms/w/workers-compensation.asp

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    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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  • 12 Ways How Companies Can Reduce Workers’ Compensation Costs

    12 Ways How Companies Can Reduce Workers’ Compensation Costs

    Are you worried about workers’ compensation costs cutting a high share of your company’s budget?

    As compared to the share a company spends on salaries and employee health benefits, this number is very high. Hence, it is vital to know how companies can reduce worker’s compensation costs. 

    Fortunately, there are many ways to do it that many companies do not know of. The different ways to reduce worker’s compensation costs are discussed below.

    12 Effective Strategies to Reduce Workers’ Compensation Costs 

    Here are a few ways a company can manage to reduce their worker compensation costs effectively:

    Install a Safety Program 

    Document a safety program and also involve the employees to participate in field practices for the same. Employees training on safety and hazard mitigation will help them be active during accidental mishaps. 

    Join Hands with a PEO or Professional Employer Organization

    A PEO will help provide the right guidance by evaluating the safety guidelines of the workplace. Also, joining hands with a PEO will help in training the worker on what to do in an emergency like a fire, etc. 

    Introduce a Return-to-Work Program

    The longer the injured employee takes to come to the office, the higher the compensation costs will be.

    Companies must maintain a return-to-work policy for their employees. Doing so will prevent unnecessary leaves leading to no extra compensatory costs.  

    Establish an Employee Wellness Program

    Companies must implement an Employee Wellness Program to educate their employees regarding workplace safety. 

    It will also help employees take precautionary measures, be alert during accidents, and manage workplace hazards.

    Provide Immediate Medical Solutions in Case of Emergencies

    Companies should be effectively equipped with the needful tools and solutions in case of any emergency. If an employee gets sick this will help curb any long-term medical issues of the employees.

    Ensure Quicker Insurance Communication

    Companies must maintain error-free insurance documentation of the employees. Doing so will prevent any mistakes during emergencies, leading to no extra compensatory costs. 

    In case of any other doubt, the quicker the insurance process, the lesser chances of incurring extra compensatory costs.

    Select the Right Insurance Policy

    Selecting the right insurance means a reduction in higher premium rates. If the market is competitive, choosing an insurance policy that best fits your available funds and resources will help cut unwanted expenses. Additionally, knowing the position of your company will help avoid paying more than you should. 

    Set a Workers’ Compensation Claims Guidelines

    Being thorough with the guidelines will help your company devise the right worker compensation plans. 

    It includes dealing with the right health insurers, verifying claim coverages, and ensuring the paperwork is correct. 

    Abide by the State Policies

    Any company policies must be in tune with the state policies this help avoid penalties. Also, many states give discounts on employee wellness programs and businesses that promote a safer work environment. 

    Instal Social Network Analysis 

    This tool helps an employer track the claims raised by different employees. So, employers can avoid mistakes in documentation, fraud claims, and multiple claims by one employee. 

    Boost the Morale of Employees

    Maintaining a healthy and positive work-life balance helps employees attain higher work productivity. Employees can lead a healthy lifestyle and, in many aspects, reduce the risks of falling sick. 

    Companies can conduct weekly fun-filled activities and other motivating sessions to keep up the morale of their employees. 

    Try to Predict the Costs of Probable Mishaps

    Predicting the costs of possible accidents in the workplace will help companies to allocate a part of their budget to cover these. Doing this will help the business to be prepared beforehand and mitigate it without incurring extra costs. 

    If you need deeper insights into human resource management and professional assistance, contact us. Also, if interested in reading more such topics read our blogs for detailed insights.  

    Reference Links:

    https://www.insperity.com/blog/workers-compensation-insurance-cost/ 

    https://www.hourly.io/post/5-ways-to-reduce-workers-compensation-costs 

    https://www.klear.ai/post/reduce-workers-compensation-costs 

    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

  • How to Reduce Workers’ Compensation Costs in 2023

    How to Reduce Workers’ Compensation Costs in 2023

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    Are you finding the best strategies to control or reduce workers’ compensation costs? 

    Every company takes specific measures to ensure their employees are safe and sound while on their job. Nevertheless, mishaps and accidents are unavoidable and can happen even at the safest job site. To prepare for such instances, every company provides workers’ compensation benefits. 

    However, to avoid it affecting the company’s cost, read about some strategies you can follow.

    What Are the 6 Strategies to Lower Workers’ Compensation Costs?

    A company with a reputation for corporating a quality workers’ compensation policy attracts potential employees to the organization. This not only boosts business growth but also adds to the goodwill. 

    However, maintain manageable workers’ compensation costs to continue a smooth business flow. The strategies that can help in the process are below:

    1.Save Money on Compensation Insurance

    As you opt for your employee’s health insurance, seeking the best compensation insurance policies is crucial. Following are the ways you can get the best policies:

    Try to speak to several companies regarding the monthly premium and rate they can offer to your company.

    Find out what your competitors are choosing and try to gather information on the same.

    2.Ensure Following Best Claim Management Practices

    Ensuring following best claim management practices will reduce the payout by almost half. So, this is a crucial strategy for any business. 

    The best practices, however, include the following:

    Make direct communication with employees to address concerns that might arise anytime.

    Ensure every necessary documentation is filed within the time and always verify the coverage.

    Try to maintain a note of all work completed on the claim.

    3.Focus More on Safety

    One effective way to improve the morale at your business is to instigate a safety platform so that they work stress-free. This will reduce your workers’ accidents or injuries and show them that the company takes care of them. 

    Here is what you can do:

    Try to constantly provide your workers with the necessary safety resources and best practices.

    Consider regular safety checks, often monthly and weekly, to ensure they are fit to work.

    Try replacing and placing old equipment and dangerous objects in places out of easy reach.

    4.Form a Procedure for Injury 

    It is necessary to manage and take care of any onsite injuries before they worsen, and this could be an effective strategy to reduce costs. 

    For this, you can do the following:

    Ask your managers, supervisors, and other workers to take immediate action during such an incident.

    Train them so that they can make quick decisions that will help in reducing the severity of the mishap. 

    5.Encourage a Return-to-Work Program

    Organizations that are in contact with injured workers during their stay at home are likely to have lower costs with workers’ compensation claims. So, encourage your workers to return to work after they heal. 

    In that case, the company will have to pay less, and the injured workers will get their paychecks quicker after returning to work early. Thus, allowing a win-win situation on both ends.

    6.Look for Safety Rewards

    Check with your insurance provider to ensure they provide credits for completing a year safely. These policies are being paid after the expiry of policies. Therefore, you must check before claiming one.

    Workers’ compensation is a necessity for any organization. You will notice a reduction in workplace mishaps as you start implementing these strategies, therefore not allowing the costs to appear burdensome. In addition, when these best practices are followed well, your workers will return to work as soon as they are medically fit, thus allowing a smooth production flow. 

    Contact us if you need assistance regarding the worker’s compensation policy. Also, if you are interested in learning more about such strategies, explore our blog section.

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    Reference Links:

    https://news.briotix.com/9-workers-compensation-cost-reduction-strategies

    https://bailyagency.com/blog/blog-reduce-workers-compensation-costs/

    https://www.emcins.com/losscontrol/insights-d/2021/11/workers-compensation-costs/

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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  • Know All About 1099 Employees and Should You Hire Them  ?

    Know All About 1099 Employees and Should You Hire Them ?

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    In simple terms, 1099 employees are self-employed or independent workers working in a company as freelancers. With the revolution in communication and workplace mobilization, it has become increasingly smooth to connect with clients and deliver work online. 

    Thus, many businesses are considering hiring 1099 employees to increase work flexibility and productivity. In case, you also are considering hiring a 1099 employee, here are all the things you should know.

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    Who Is a 1099 Employee?

    A 1099 employee is an independent worker who needs to report the income to the IRS by filling out a 1099 tax form. They mainly include freelancers, independent contractors and consultants and are actually non-payroll workers of a company. 

    When a company hires a self-employed worker, it is treated the same as a contractor signing a contract with a business. As a result, the individual and the company must work together to complete the task at an agreed rate. 

    What Are the Different Categories of 1099 Employees?

    The following are the different categories of 1099 employees that provide services to the general public as an independent contractor:

    • Dentists
    • Doctors
    • Real Estate Agents
    • Veterinarians
    • Contractors
    • Accountants 
    • Lawyers

    What Are the Advantages of Hiring 1099 Employees?

    The following are the benefits companies can enjoy by hiring 1099 employees over W2 workers:

    • Lower Business Expense

    If companies recruit 1099 employees, they do not have to pay taxes to the government on behalf of the independent worker. Moreover, there is no requirement to provide health insurance, unemployment insurance, employee compensation or others. 

    In addition, owners do not even have to give the self-employed any sick leave or retirement benefits. As a result, companies can save 30% of their cost on human capital and other business expenses.

    • Better Market Agility

    When working with independent workers, companies can get better market agility. In addition, unlike full-time employees working for the organization for years, management has the option of ending the working relationship with freelancers. 

    Thus, companies can approach new independent workers with current market knowledge to take up the task as the market changes.

    • Access to Talented Human Resource

    In search of full-time employers, companies often miss out on the opportunity to work with talented professionals. This is because a high chunk of people opts to work independently. They like to have a flexible work schedule, the ability to pick ones they want to work with and get the freedom to set their rates. 

    Thus, by hiring 1099 employees, management also gets the chance to build a working relationship with this talent pool.

    What Are the Risks of Hiring 1099 Employees?

    While there are many benefits of hiring 1099 employees, there are a few risks involved, too. They are:

    Misclassification: Though initially, 1099 employees will be working as independent workers, gradually their relationship with the company may change over time. So, it is best to review the status of the contract every 2 to 3 months to avoid misclassification.

    Penalties and Fines: If authorities find that your company misclassifies workers, it can attract huge penalties, fines, back taxes and even lawsuits. 

    Worksite Injuries: If the independent contractors you hire do not have insurance coverage, your company may be liable for his/her recovery.

    Should You Hire a 1099 Employee or W-2 Employee?

    Companies need to be agile, competitive and fast in the current business environment. Moreover, this is only possible when you hire 1099 employees along with full-time employees. First, however, you must understand how to work with independent contractors without creating risks to benefit from it. 

    To sum up, if you find a balance and do not cut corners with the IRS, then employing 1099 workers can benefit you. To gain more knowledge relating to business or management, you can check out our blog section. 

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    Reference Links:

    https://velocityglobal.com/blog/5-things-know-hiring-1099-employee/#:~:text=A%201099%20employee%20is%20an,a%20contract%20with%20a%20business.

    https://employersresource.com/business-compliance/what-is-a-1099-employee/

    https://www.stoketalent.com/blog/what-is-a-1099-employee/

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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  • Stop Overpaying for These 4 Business Expenses: What and How  ?

    Stop Overpaying for These 4 Business Expenses: What and How ?

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    Have you recently started a new business and should be making more profit than now? 

    While companies believe investing tons of money can lead to success, they miss out on an essential point. Entrepreneurs also need to implement strategies that cut off expenses, release debts and start making better profits. Another reason owners struggle to make gains is overpayment.

    Want to know what these business expenses are to stop overpaying? Here is a list of 4 major business expenses with suggestions on how to avoid them.

    • Non-Targeted Advertisement

    A crucial mistake that businesses make is to spend on adverts that are not based on previous buying behavior of its users. In other words, you must know your target audience when putting out adverts on Facebook, Google Adwords, and on other platforms. If not, it will not only cost the business money but also not bring you back any return on your investments.

    Further, try incorporating free advertising tools into your advertising strategy, like customized mail, blogs, guest-post, etc. Also, create a social page to connect with your client and customers for more clarity and minimal expenditure.

    • Payment Processing

    Businesses often require payment processing services to complete credit and debit card payments. However, we know that every service comes with a fee, so you must compare different payment processing service providers to save to the maximum. 

    Every quote you receive may seem low initially but with frequent and larger payments, the cost gradually increases. Furthermore, there can be hidden costs too. So, analyze these to find a cost-effective option.

    • Video Conferencing

    Do you use a professional video conferencing program to host remote meetings with employees and clients? You can save a lot of money by switching to free ones. Moreover, they are as good as paid ones. 

    However, if you are worried that free options will have a time limit on how long your meetings can stretch, think of it in a positive light. In other words, when you have a time limit, you tend to list all the important points in a short/crisp manner, thus increasing work productivity.

    • Taxes

    Most entrepreneurs develop a habit of overpaying taxes to avoid penalties of underpayment. However, this affects your annual profit. So, it is better to take help of an audit firm.

    Not to mention, it is easier to keep track of every credit deduction, tax due, and real estate issue with expert assistance as this further causes overpaying. So avoid it by hiring professional bookkeepers or accountants. 

    While these are the ways you can avoid overpaying business expenses, some entrepreneurs are not able to realize they are overpaying. So here are some ways you can spot them for better money management.

    4 Ways to Spot Your Overpayments for Business Services

    There are many services and software available in the market. Thus, it is easy to overpay to set up the best payroll and management. To avoid this, look for these things.

    • Better cost-effective methods: Use your free time searching for better options to find cost-effective methods as soon as they arrive.
    • Identify the cost-cutting sections: Overview different parts of your business and search for things that take up the most time and money. These areas are the ones whose service you need to outsource. 
    • Bargain for the best deal: Analyze whether you should accept the first offer of a service provider or if you should instead negotiate a term in which you and your provider are both in profit. 
    • Economic sustainability: Paying less is nice, but you must also keep a track of the quality. It is essential to survive among competitors and maintain economic sustainability in the long run.

    Entrepreneurs often get caught up in searching for more investments and in expanding horizons, but keeping a tab of all expenses are equally important. If you need professional assistance to devise cost-effective strategies, contact us today. We also help educate managers and entrepreneurs about other business areas through our blog section to reach new heights. Follow us for more!

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    Reference Links:

    https://www.forbes.com/sites/johnrampton/2017/12/07/10-ways-to-avoid-overpaying-for-services/?sh=2611fda71d21

    https://due.com/blog/business-expenses-overpaying-for/

    https://www.theplazabeachroad.com/5-business-expenses-and-how-to-avoid-overpaying-for-them/

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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  • Top 3 Tax Benefits for the Residents of Florida

    Top 3 Tax Benefits for the Residents of Florida

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    When speaking of Florida, the first thing that comes into mind is its sunny weather, beach fun, and the top quality of living. But did you know they offer top tax benefits too?  

    The favorable tax policies benefiting both younger and older taxpayers are adding ways to make Florida the new financial hub. Not only this, but the least corporate tax rate and increased opportunity are also calling entrepreneurs to settle their business here. Read more to know about these tax policies in detail!

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    What Are the 3 Primary Tax Benefits That You Can Enjoy in Florida?

    Apart from offering talent and new opportunities, there is one more reason people shift to Florida, i.e., its tax benefits. Here are the details:

    • Business Tax Benefits

    The business-friendly tax policy followed by Florida creates a favorable environment to carry large and small-scale operations in the state. According to a recent estimate, it is seen that families and businesses are saving more than 168 million dollars through this tax benefit. 

    Here below are some business taxes that you either don’t have to pay for or get a tax break on it:

    • Property tax on goods-in-transit and business inventories
    • Sales tax on raw material procurement
    • Corporate franchise tax on capital stock
    • Tax benefit on insurance premium
    • Corporate income tax liable on limited partnership

    Florida also offers various tax exemptions to promote a healthy environment to companies that utilize clean energy. The resources exempted from tax are solar energy systems, natural gas used to produce electricity, and steam or electricity required for manufacturing.

    • Inheritance and Estate Tax Benefits

    Many wealthy individuals are flocking to Florida after inheriting property and wealth to enjoy no inheritance tax benefit, also called ‘death tax.’ Though back in time, Florida used to collect state estate tax as a ‘pick-up tax’, later, after the changes in the Federal tax, it resulted in the phasing out of this tax. 

    Now when many states are still determined to keep state death tax, the constitution of Florida prohibits imposing state death tax on its residents. In other words, residents of Florida and their heirs do not have to pay estate taxes to the government.

    • No Tax on Income or Retirement Benefits

    Florida is the only one in the nine states that do not charge a tax on individual income. Thus, there is no wonder it attracts so many people to reside in the state. 

    However, tax-free retirement benefits form one more reason for a man to reside in Florida even after retiring. Below are the incomes on which retirees do not have to pay tax in Florida:

    • Social security income
    • Income earned from a part-time job
    • Private and public pension income
    • Retirement account withdrawals

    This help save thousands of dollars that you may have incurred by living in other states. Like, while the income tax is 0% in Florida, other states charge 3% to 9% tax on income. In fact, the constitution of Florida also prevents municipalities and counties from imposing income tax on local levels. 

    This sums up the tax benefits individuals and employers can attract by moving to Florida. However, there are much more reasons for entrepreneurs to move their business to Florida, like the diversity of talent, lower cost of operation, and reduced real estate costs. So, contact us to ensure a smooth transition if you plan to shift your business. 

    We can provide you with an experienced HR team that can take up any business challenge that is to come. Also, if you like, you can read more about management, business, and public relation in our blog section. It can give you more knowledge of the field. 

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    Reference Links:

    https://www.ey.com/en_us/financial-services/changing-state-residency-tax-considerations-when-moving-to-florida

    https://www.europeanbusinessreview.com/top-5-tax-benefits-of-becoming-a-florida-state-resident/

    https://tributaryliving.com/5-financial-benefits-of-making-the-move-to-florida/

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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