THE NEXT STEP: ADDING EMPLOYEES November 12, 2015

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Letitia Richard
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1 THE NEXT STEP: ADDING EMPLOYEES November 12, 2015

3 Creating a business plan Planning resources Insurance LLC, S-Corp, Sole Proprietor Licenses, clearances, permits Finding funding Looking for an accountant Proposals Bids Waiting Waiting Waiting

4 THEN HURRAY! YOU GET THE CALL THAT YOU GOT THAT CONTRACT AND THEY FINALLY AWARDED YOU THE MONEY AND IT STARTS IN TWO WEEKS AND YOU HAVE TO HIRE SOMEONE OR SOMEONES! RIGHT NOW

5 Don t Freak Out!

6 Employee Management Areas to Consider

7 1 RECRUITING You have to find the right people. From your contract specs you will know if you need to pay everyone as a W-2 or if 1099s are acceptable. Background checks and security clearances are mostly taking place in this phase. Job descriptions should be available. Interviews are being conducted and offer letters are sent out.

8 2- ONBOARDING Once someone has accepted the position, you will need to collect the correct forms from the individual. Do not get these forms from them until they are hired. W-4 Federal Withholding State Withholding Form (according to the state in the which the employee lives) I-9 Authorization to Work in the U.S. Direct Deposit Authorization and Voided Check (if you are offering that option) Other onboarding tasks that are internal to your business

9 3- HUMAN RESOURCE MANAGEMENT Keeping up with labor laws in the state and federal realm Providing an Employee Handbook to new employees and having them acknowledge Creating plan for performance reviews for the employee Providing trainings required by your contract such as Non- Harassment or Ethics Obtaining Worker s Comp insurance if required

10 4 BENEFITS What benefits will you offer starting out? 401(k) Health Insurance Vacation/Paid Time Off Are most commonly desired Others: Life Insurance Short-Term Disability Long-Term Disability Dental Vision Tuition Reimbursement

11 5 TIME & ATTENDANCE Employee will need to keep up with time worked. Even salaried employees may have to track time and hours worked on certain contracts. Specific contracts may have specific requirements. DCAA Compliance is key for many contracts. Don t just trust a website that claims to be DCAA compliant. Your and your employee s use of the software will determine your compliance.

12 6- PAYROLL Not just writing out a check (see next slides)

13 PAYROLL 101 EMPLOYEE EMPLOYER (11%) Social Security (6.2%) (Up to $ in wages) Medicare Tax (1.45%) (2.35% for individuals earning over 200,000) Federal Income Tax (based on W-4 filing status) State Income Tax (State withholding allowance certificate) Social Security (6.2%) (Up to $ in wages) Medicare Tax (1.45%) Federal Unemployment Tax (.6 (Up to $7,000 in wages/employee) ($42.00/employee/year) State Unemployment Tax (2015 New Business Rates) VA 2.84% (up to $8,000 in wages/employee) MD - 2.6% (up to $8,500 in wages/employee) DC - 2.7% ($9,000 in wages/employee)

14 THE 43 REQUIREMENTS OF LEGAL PAYROLL Quarterly Federal Tax Returns (Form 941) 4 Federal Tax Deposits 12 State Withholdings Deposits (Monthly) 12 Federal Unemployment Tax Deposits 4 Federal Unemployment Tax Return (Form 940) 1 Quarterly SUI (State Unemployment) Tax Returns 4 Quarterly State Unemployment Tax Deposits 4 Form W-2 (One/Active and Terminated Employee) 1 Form W-3 1 TOTAL EMPLOYER TAX RESPONSIBILITIES 43 40% of small business owners pay a payroll tax penalty each year, averaging $845.

15 Salary $60, Social Security (Employer) 6.20% x $60, = $3, Medicare (Employer) 1.45% x $60, = $ FUTA 0.60% x $7, = $42.00 SUI (VA) 2.84% x $8, = $ TOTAL COST OF EMPLOYEE: $ Budgeting for your employee s salary should include these calculation.

16 The biggest cost of an employee to the employer is the employer payroll taxes. Don t let just anyone help you with this!!! Be sure the company you work with is bonded and insured, will take full liability for any tax mistakes made on their watch, and has the most updated secure technology.

17 7 MANAGEMENT AND RETENTION Creating the right culture and work environment Providing resources for employees to do their jobs well Regular performance appraisals and career pathing Providing competitive compensation packages that will create long term loyalty

18 8 - SEPARATION Creating a system of disciplinary documentation Responding to unemployment claims COBRA administration Conducting Exit Interview and providing last paycheck

19 RESOURCES TO HELP YOU

20 With all of these tasks on your shoulders, you have to decide whether to keep them in house or outsource them. IN HOUSE

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23 One of our most popular solutions for government contractors: Paychex HR Solutions A complete package of administration, compliance, and employee benefits services. Dedicated ONSITE HR Generalist who helps build your HR infrastructure from the ground up Employee Handbook Policies and documentations New Hire Onboarding process Safety trainings Employee Assistance Programs Retirement 401(k) Plan Flexible Spending Account Job Descriptions Compensation Surveys Payroll and Taxpay Services Time and Attendance HRIS system to keep employee documentation organized Benefits Administration COBRA Administration

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24 Paychex Flex an one stop portal for all Paychex services single sign-on access for employees and employers to get all information in one place Paychex Hiring an electronic onboarding system your new hires will receive an and complete all required documents remotely GREAT FOR EMPLOYEES WORKING OFFSITE Paychex FlexTime a state-of-the-art cloudbased Time and Attendance system that integrates with payroll and general ledger reporting

Worker s Compensation insurance with pay as you go premiums

25 Full service insurance agency, offering all lines of insurance including group health, dental, vision, life. Worker s Compensation insurance with pay as you go premiums Auto-integration of employee contribution deductions from payroll Employee access to benefits at Paychex Flex online account

26 For a consultation, please reach out to me directly: Brooke Ray bray@paychex.com mobile Feel free to or text

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