TweetChat with @SurePayroll on June 5, 2013, 12 noon ET/11 am CT

• Hashtag: #FirstHire

• Host: SurePayroll CEO and President Michaeal Alter

• Topic: When do you hire your first employee? Michael Alter will give valuable tips to small business owners on the often difficult task of making their first hire.

Business owners and entrepreneurs will be able to chat in real time with small business expert Michael Alter about when the right time is to hire, how to pick the right candidate, and what the legal and financial requirements are for employers.

Submit questions in the Give Us Your Thoughts section below.

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The post Join us for the #FirstHire TweetChat on June 5, 2013 appeared first on The Payroll Blog.

While this is great news for many, it’s particularly good to hear for the female side of the workforce. The Bureau of Labor Statistics reports that from January 2009 through December 2011, 6.1 million workers age 20 and older were displaced from jobs they had held for at least three years – women accounted for nearly 44 percent of those displaced.

What’s more, women were less likely than men to have found a new job at the time of the survey, which took place in January 2012.

But it’s not all doom and gloom for women in the workforce. The Bureau reports that more than 65 million women contribute to the county’s annual GDP. That breaks down to be roughly 58.1 percent of women in the United States.

Women are in every industry under the sun, and many of them are making extreme inroads in their careers. Compensation for women also has been on the rise, closing the gap between male co-workers.

According to the Bureau, in 1979, women working full time earned 62 percent of what men earned. However, in 2011, women’s earnings came to roughly 82 percent of men’s. While there is still room for improvement, some women are making the best of it. CNN Money magazine recently announced the highest paid women in business, the 2012 list includes:

1. Safra A. Catz, president and CFO of Oracle, Inc. ($51,695,742)

2. Wellington J. Denahan, chairman and CEO of Annaly Capital Management, Inc. ($35,009,956)

3. Sheryl K. Sandberg, COO of Facebook, Inc. ($30,957,954)

4. Debra Cafaro, Chairman and CEO of Ventas, Inc. ($18,498,831)

5. Margaret C. Whitman, president and CEO of Hewlett-Packard Co. ($16,518,930)

Moving from the boardroom to the big screen, these starlets earned the most in 2012, according to Forbes magazine.

1. Kristin Stewart ($34.5 million)

2. Angelina Jolie ($30 million)

3. Cameron Diaz ($34 million)

4. Sandra Bullock ($25 million)

5. Charlize Theron ($18 million)

And these women set records while making them, literally. Forbes also released the top salaries of women in music. The list was compiled based on income from record sales, touring, endorsements, merchandise sales and other ventures. The figures represent earnings from May 2011 to May 2012.

1. Britney Spears ($58 million)

2. Taylor Swift ($57 million)

3. Rihanna ($53 million)

4. Lady Gaga ($52 million)

5. Katy Perry ($45 million)

Sources (and related articles):

www.bls.gov

http://money.cnn.com/gallery/magazines/fortune/2012/09/27/25-highest-paid-women.fortune/index.html

http://www.forbes.com/sites/zackomalleygreenburg/2012/12/12/the-top-earning-women-in-music-2012/

http://www.nytimes.com/2013/05/04/business/economy/us-adds-165000-jobs-in-april.html?_r=0

The post A Bigger Piece of the Pie: America’s Highest Paid Women appeared first on The Payroll Blog.

Thus, the question lingers: To hire a new grad or not?

According to the National Center for Education Statistics, more than 1.7 million young women and men will be shaking hands and accepting a college diploma within the next few weeks. However, the class of 2013 faces a somewhat bleak employment landscape. As noted by the Wall Street Journal, the hiring of college graduates from the class of 2013 is expected to increase only 2.1% compared to last year – the smallest uptick since 2009. That year’s graduates actually experienced a 21.6% decrease in hiring from the year prior.

As the class of 2013 hits the pavement in what is still considered a soft economy, business owners must consider their return on investment when it comes to bringing aboard new college graduates instead of experienced hires.

Dr. John Sullivan, professor of management at San Francisco State University, generated a list of amenable qualities recent college graduates can bring to the proverbial table. Originally posted on the hiring site ERE.net, the list makes a case for hiring new college graduates by giving an employer a good sense of what to expect – in the short term – from the new set. Perks include:

• Lower salary costs 
• Comfort with technology, including the Internet and social media
• High levels of innovation 
• Workload agility
• More fluidity with multitasking   
• Increased energy and enthusiasm for the work or position
• Greater willing to take high-risk assignments
• Greater willingness to do grunt work
• Greater willingness to travel
• More diverse ideas for solutions
• Faster time to productivity

Of course, not all new college graduates are made of the same material. Thus, they won’t all bring the same attributes to a company. Regardless, Sullivan makes a convincing case for hiring these fresh-faced employees when considering the long-term investment for a company.

According to Sullivan, hiring new grads at entry-level positions opens a business up the possibility of filling management roles in five to seven years. “If you do hire new college graduates, they are yours to lose,” he notes. “So with great retention and career development, they will continue to be an asset to your firm for up to 40 years. Mid-career hires can’t possibly return value for the same number of years.”

Sources (and related articles):

http://www.naceweb.org/Home.aspx

http://blogs.wsj.com/economics/2013/04/18/hiring-momentum-slows-for-college-grads/

http://www.ere.net/2011/12/12/the-business-case-for-hiring-college-grads-reasons-they-can-produce-a-high-roi/

The post Hiring College Grads: Investment or Liability? appeared first on The Payroll Blog.

Workers’ compensation is a mandatory requirement that businesses pay for injuries workers sustain in the course of their employment. Rates and rules vary by state and frequently change due to the whims of the state legislatures.

As you can see from this state-by-state chart and accompanying rate index, where your company is relocated determines how much it will pay in workers’ compensation insurance.

The difference in state rates can be dramatic enough that it is a factor in locating or relocating a business. For most business owners, however, relocation is not cost effective, possible or desirable for personal reasons.

Some companies have undertaken more aggressive safety prevention training programs, such as this construction firm in Florida. Insurance premiums can be lowered by lower rates of accidents on the job.

Other companies are rethinking the type of insurance they buy. More and more, they are looking at “pay-as-you-go” models that integrate into a company’s payroll.

SurePayroll offers an add-on pay-as-you-go workers’ compensation insurance service through various nationwide carriers. The firms can advise you if your present coverage is appropriately sized for your company and if pay-as-you-go coverage can save you money. Companies generally appreciate the added flexibility that this relatively new model brings.

Under traditional workers’ compensation insurance, a company pays large pre-paid sums at the start of a year and settle up any differences at year’s end. The obvious disadvantage is that a company gives up cash flow and is subject to year end surprises that can rattle the balance sheets.

With pay-as-you-go insurance, the carrier integrates the payment through the payroll service so just the right amount is deducted each month as necessary. That lessens any year-end surprises and dramatically improves cash flow. It also saves money because no massive up-front premium is paid.

When it comes to workers’ compensation, a small business owner should explore all options because a good safety record and the right insurance choice can result in significant cost savings.

The post Rethinking Workers’ Comp: Consider Pay As You Go appeared first on The Payroll Blog.

When employees wear multiple hats at work, job-related stress is bound to increase and the business becomes vulnerable to costly errors. However, there is an answer.

The benefits to outsourcing administrative tasks have been well documented over the last several years. For example, SurePayroll recently highlighted the growing trend toward utilizing virtual assistants as a means for business owners to enhance efficiency in the administrative realm.

Hiring a virtual assistant to prepare and send a shipment of products, organize the filing system or cross-check the spreadsheets is a good use of everyone’s time. Yet, these employees-for-hire may not be the right fit for one of the most time-consuming – and easily outsourced – business responsibilities: payroll.

Payroll is its own beast. It’s an on-going process with different variables at every turn. Often it seems once the task has been conquered, regulations and technology change. Also stressful is the ever-present risk that the person who tackles the payroll process will leave the company, taking his or her payroll expertise along with their nameplate.

Thankfully, the marketplace has evolved in such a way that payroll outsourcing is a viable option for many companies, thus reducing the stress associated with the process. However, delegating the process to another is not the best fit for every operation. Knowing when to outsource payroll is an important element for business to rationalize.

According to Entrepreneur.com, factors such the number of employees at the company and the skill level of the payroll processor should be considered before outsourcing payroll. “The key to having an effective payroll system is keeping accurate data that can be retrieved at a job level within your overall accounting system that is managed by a capable individual–be that internal or external to your organization,” the site notes.

Making the Call

A small business with 10 employees will typically spend as much as $2,600 per year in direct labor costs associated with payroll. With that in mind, the direct costs of processing payroll can be greatly reduced by outsourcing the task.

The decision to let go of the reins and outsource payroll has benefits beyond time and money savings; it can stave off a visit from Uncle Sam as well. Withholdings are a delicate matter when it comes to payroll processing. There are various state and federal withholdings that are mandated by the government, as well as optional withholdings for insurance and dues.

As noted by SurePayroll, using the wrong tax tables can result in stiff penalties. Outsourcing payroll removes the risk factors associated with taxable income and witholdings and keeps payroll running smoothly, allowing for more time to dedicate to growing the business.

Sources (and related articles):

http://www.entrepreneur.com/article/191308

http://www.surepayroll.com/product/payroll/articles/benefits-of-outsourcing-payroll.asp

The post Payroll Outsourcing: How Do You Make the Call? appeared first on The Payroll Blog.

Passed in 1938 by Congress and signed by the President, the FLSA introduced a maximum 44-hour, seven-day work week, established for the first time a national minimum wage, guaranteed time-and-a-half for overtime and prohibited most types of child labor.

The law has been widened in subsequent years to include equal pay for men and women and other minor provisions. Here is how the U.S. Department of Labor describes the Act today:

The Fair Labor Standards Act (FLSA) , which prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. For nonagricultural operations, it restricts the hours that children under age 16 can work and forbids the employment of children under age 18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous. The Act is administered by the Employment Standards Administration’s Wage and Hour Division within the U.S. Department of Labor.

It is important to distinguish what the law does not require. According to a State of Texas employment guide, the Act does not require:

• Breaks. Some states require work breaks, but the FLSA does not.
• Employers to pay for lunch breaks. Under federal law, lunch time is treated as an unpaid break for purposes of eating a meal.
• Premium, holiday or weekend pay. This is usually offered by employers as an expected perk, but it is not required under federal law.
• Shift differentials. Companies often offer extra pay for unusual work hours, but, again, federal law does not require it.
• Raises. Unless it is covered by federal minimum wage guidelines, periodic pay raises are not required under federal law. In practice, raises are offered almost universally and regularly by most employers.

The FLSA is not something most employers and employees think much about these days, even though it forms the framework for how we have structured the workplace in America.

The post What is the Fair Labor Standards Act and Why Does it Matter? appeared first on The Payroll Blog.

Last year we brought you the world’s 10 highest paid athletes and now Sports Illustrated has released a list of the top 10 highest paid in the U.S. We thought it would be nice to compare, as well as look at the paychecks of some of sports’ biggest names. How would you like to have these pros on your payroll?

1. Floyd Mayweather Jr.

The post The Highest Paid Athletes in the U.S. appeared first on The Payroll Blog.

That logic is sound on one level, but fails on another — there are many hidden costs in replacing employees.

CBS’ Money Watch notes this:

Turnover costs include productivity losses during training, recruiting and lost work while a position is vacant.

Some studies indicate the cost can be as much as 20 percent of that position’s annual salary.

Those hidden costs illustrate the importance of a sound recruiting process, effective background checking and screening, and, once an employee is hired, thorough and effective job training.

The higher the salary of the worker, the more money a company loses when replacing them.

Although there are different ways to look at this problem philosophically, the CBS Money Watch report notes that some companies, instead of focusing on tightening their screening process, concentrate on improving employee conditions.

MIT Sloan business professor Zeynep Ton found that such businesses could reduce their turnover by changing their internal policies. For instance, Wegmans Food Markets, which consistently ranks in Fortune’s Top 100 companies to work for (this year it’s number No. 4), has a full-time turnover rate of only 4 percent for it’s hourly workforce. In other words, those same policies that make it a great place to work also lowers turnover costs.

Regardless on how a company addresses the costs of replacing a full-time employee, it is happening amid an environment where full-time workers are getting scarcer. Our economic slowdown has caused companies to hire more part-time workers in lieu of full-time staff.

The lesson is that your core, full-time employees are scarcer and more important than ever and ideally it’s better to hire correctly and keep them happy if you want a prosperous bottom line.

The post The Costs of Replacing a Full-time Employee appeared first on The Payroll Blog.

This is not exactly a profound revelation, but sometimes companies take their eyes off the ball.

Smart Business recommends a four-prong approach:

• Friendliness. There’s no use treating your new employee like an adversary. No matter how sticky the negotiations might become, try to conduct them with a smile — the good will you engender could come back to the company ten-fold.
• Preparation. There’s no substitute for homework. Knowing all the competing numbers is essential. After all, your new employee might come armed with mountains of research so make sure you can keep up.
• Flexibility. Sometimes, it’s just not possible to pay the salary the new hire would like. Be creative in adding other perks that might satisfy both the company and the new employee.
• Honesty. This is not a time to play games. State honestly why you offering the salary and benefits you have put on the table and don’t be vague or evasive. Above all, an employee values being told the truth and treated with the respect he or she deserves.

The fundamentals above are important to keep in mind because occasionally a new hire engages in gamesmanship in order to extract a higher salary.

Fortune Magazine recently spotlighted a study that said applicants who make a joke about wanting a $1 million salary actually receive higher initial offers by 10 percent than those who don’t make such a joke.

The hypothetical applicant in the study’s test scenario was an administrative assistant candidate who had listed her last salary as $29,000. When asked what salary she wanted in the new job, she either demurred or quipped, “Well I’d like a million dollars, but really I just want what’s fair.”

In the cases where the applicant declined to name any number, the average salary offer was about $32,500. When she joked about a million bucks, the average offer rose to almost $36,200.

The increase is a function of a psychological effect known as “anchoring.” “When we encounter a number — even an irrelevant number — we fixate on it, and it influences our judgment,” Todd Thorsteinson, a psychology professor at the University of Idaho and the study’s author, is quoted in Fortune.

As long as management keeps in mind the fundamentals, it shouldn’t fall victim to salary negotiation sleight of hand like the $1 million quip.

The post Salary Negotiations: The $1 Million Quip appeared first on The Payroll Blog.

Before you get too excited, however, you want to become familiar with both the pros and cons of this arrangement.

Pros

1. Save money on gas while avoiding wear and tear on your vehicle. With gas prices hovering around all-time highs, it is always nice to save a few dollars by driving to work with others.

2. Make friends at the office. If you are the type of person who is interested in making friends with coworkers, this is one of the best ways of doing so. Spending time in the car, driving to and from work, will give you plenty of time to talk.

3. Less stress. On the days when you are not driving, you can sit back and relax as opposed to dealing with traffic.

Cons

2. Office gossip. Is there anything worse than people who gossip about everything that goes on in the office? If you aren’t careful, you may find yourself traveling down the highway with somebody who enjoys spreading rumors.

3. People not taking their turn. A carpool is only a carpool if everybody takes a turn. You could find yourself driving more than your share if you don’t carefully choose your carpool mates.

4. Potential problems if somebody calls off work. What will you do if the person scheduled to drive calls off work for an emergency? Will you be able to pick up on the fly and get yourself to the office on time?

These are just a few of the many positives and negatives of carpooling with coworkers. Can you think of any others that will allow you to make a more confident decision?

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The post Carpooling with Coworkers: The Pros and Cons appeared first on The Payroll Blog.