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Riding the Wave of Minimum Wage

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Seattle recently adopted the nation’s highest minimum wage, raising an employee’s pay to $15 an hour. This represents a 60-percent increase from $9.25 and more than double the national average. Hold on – before anyone packs their bags to head to the Emerald City, finish reading.

This decision came soon after hundreds of employees from fast-food chains went on strike in hopes of forcing employers to pay a higher hourly wage. Although this more-money movement pushes to close the income-inequality gap and lower the poverty level, it may end up doing more harm than good. Even if minimum wages increase, small and large businesses alike threaten to release workers as a result.

The plan from Seattle Mayor Ed Murray would give companies with no more than 500 employees seven years to implement the new wages; larger companies would get three years. Whether the plan comes to fruition remains to be seen, but what businesses need to take away today is the value of each employee. As minimum-wage changes are implemented, companies will see their workforce drastically change, which directly impacts the value of their hiring process. Employers can use the increase in wages to their advantage, in order to create more revenue and a stronger overall business.

There are a number of things employers should understand as they move forward in this new per-hour era, but among the two most relevant are below.

  1. Everything is more expensive

 

The federal minimum wage is $7.25 an hour. In contrast, Seattle’s increase to $15 paints a bull’s-eye on organizations with high turnover rates. Research indicates the cost of firing an employee is, conservatively, 30 percent of his or her annual salary. When calculating full-time employees only, the payment cycle breaks down to:

  • $7.25 (federal minimum wage) x 40 (hours per week) = $290 a week
  • $290x 52 (weeks) = $15,080 a year

 

By these numbers, the off-boarding process can cost employers $4,524 per fired employee without breaking a sweat.

Managers realize how difficult it is to let an employee go, but they also understand the obstacles and costs of finding another suitable candidate. To replace anyone in your workforce is tedious and time-consuming. The on-boarding process involves paperwork, training and switching schedules to accommodate the newcomer’s lack of experience.

Although many may not notice, the minimum-wage level plays a crucial role in whether employers can afford to hire additional help. By raising the minimum wage to $15 an hour, the entire cost of the process is turned on its head. Below are the new numbers for employers to consider before taking action:

  • $15 (proposed minimum wage) x 40 (hours per week) = $600 a week
  • $600 x 52 (weeks) = $31,200 a year

 

The numbers never lie. Employers in Seattle will have to ask themselves if replacing one employee is worth approximately $9,360.

  1. You get what you pay for

 

From an employer’s viewpoint, one silver lining is that the door for new possibilities has been opened. The days of hiring the next person to walk in and scribble their name on an application are over. “Minimum wage” is synonymous with “minimal risk,” and as that figure grows, employers should realize that a candidate with only a high school diploma or GED may not be worth any risk. Raising the minimum wage allows managers to be more selective in whom they hire. In doing so, organizations can seize the opportunity to hire only those candidates who have the skills to rise up in the company, thereby granting organizations more assets, which in turn leads to business growth.

If the minimum wage should double nationwide in the coming years, managers also should double their efforts in hiring the right employees. Seattle’s situation already has demonstrated a ripple effect southward, as activists have gained ground in San Francisco and Los Angeles to raise the hourly wage to $12.82 and $15.27, respectively. Now more than ever, organizations and their management need to align their business practices with the changing pay landscape.

OK, now you can pack your bags. But don’t be naive: Raising the minimum wage to $15 may not necessarily correlate to a stronger economy. When it comes to the level of the minimum wage and the number of actual jobs, more could mean less.


Aaron Santelmann

by Aaron Santelmann


Author Bio:

A young and enthusiastic writer and researcher, Aaron is an instrumental member of Paycom’s lead generation and reporting team. Aaron is an engaging writer who maintains a strong presence on Paycom’s blog where he focuses on politics, government and compliance, tax guidelines and other employer regulations that impact businesses across the country. Outside of work, Aaron enjoys reading, exercising and spending time with his family.

What Substance Abuse in the Workplace Costs Employers

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Of the estimated 14.8 million Americans who use illegal drugs, 70% of them are employed, according to the U.S. Department of Labor. Therefore, odds are your company employs workers who fall into this group. The use of drugs or alcohol by employees inside or outside the office can be costly for a business, leading to:

  • increased turnover rate
  • workplace incidents
  • poor workplace morale

From a financial perspective, the National Institute on Drug Abuse found substance abusers cost employers twice as much in workers’ compensation and medical expenses. Additionally, substance abusers are five times more likely to file workers’ compensation claims.

Furthermore, employees with alcohol dependencies are nearly three times more likely to have injury-related absences, according to the National Council on Alcoholism and Drug Dependence. In 2015, that council reported that federal surveys indicate 24% of workers reported drinking on the job at least once in the past year.

Recognizing the signs

Knowing how to handle substance abuse in the workplace starts with recognizing the existence of a problem. Whether it is abuse of alcohol, prescription drugs or illegal substances, a number of visible signs can indicate an employee needs help:

  • change in appearance
  • frequent tardiness
  • decline in job performance
  • slurred speech and drowsiness
  • mood swings and irritability
  • scent of alcohol

None of these signs alone indicates a substance abuse issue, but intervening early with employees displaying a combination of these signs may be valuable to your business. Implementing a companywide policy, training managers to recognize signs of substance abuse, and setting expectations with employees through training can help safeguard your business and your workforce.

 Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

 

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Posted in Blog, Compliance, Featured

Jason Hines

by Jason Hines


Author Bio:

Jason Hines is a Paycom compliance attorney. With more than five years’ experience in the legal field, he monitors developments in human resource laws, rules and regulations to ensure any changes are promptly updated in Paycom’s system for our clients. Previously, he was an attorney at the Oklahoma City law firm Elias, Books, Brown & Nelson. Hines earned a bachelor’s degree from the University of Central Oklahoma and his juris doctor degree from the Oklahoma City University School of Law, where he graduated cum laude. A fan of the Oklahoma City Thunder, Hines also enjoys exploring the great outdoors with his wife and daughter.

Podcasts

5 Podcasts That Every HR Professional Should Download

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Podcasts provide the opportunity to sit like a fly on the wall and listen to some of the most brilliant minds in the world converse about today’s biggest trends and challenges.

According to a study by Triton Digital, nearly one quarter of Americans listen to a podcast at least once a month. Education is a popular subject, with 40% of podcast listeners tuning in to that type. If you’re an HR professional or business leader looking to broaden your knowledge of HR and HR technology this year, I highly recommend filling your ears and brains with these five podcasts throughout ’18.

1. HBR IdeaCast

From Harvard Business Review, the weekly HBR IdeaCast features leading thinkers in business and management discussing a variety of key topics in the work world.

It is an excellent resource for insights on a wide array of subjects including, but not limited to, HR. The discussions apply directly to organizations nationwide. The podcast reminds me of NPR’s Fresh Air, but with an emphasis on business leaders.

Recommended episodes:

2. HR Happy Hour

Since 2009, HR Happy Hour has featured thought leaders, workplace and technology experts, academics and more to take on important aspects impacting HR, technology and the workplace.

The podcast is so long-running that it has episodes dedicated to just about every HR topic under the sun. The charming hosts Steve Boese and Trish McFarlane make trending topics fun and informative.

Recommended episodes:

3. CIPD

From the UK’s Chartered Institute of Personnel and Development, the monthly CIPD podcast covers everything from talent acquisition to workplace training and cybersecurity.

CIPD’s international perspective brings fresh eyes to subjects that resonate with many American HR professionals. With a backlog of more than seven years’ worth of episodes available, it’s easy to recommend.

Recommended episodes:

4. Workology Podcast

Covering the science and art of the workplace, Jessica Miller-Merrell’s Workology Podcast offers insights and actionable tips on HR and recruiting. Each 45-minute episode promises an in-depth look at every company’s most valuable asset: the employee.

In asking sharp, pointed questions about the latest HR trends, Miller-Merrell does an excellent job as host, bringing a unique and often unexpected take on familiar subject matter.

Recommended episodes:

5. HR Break Room

The official podcast of Paycom, HR Break Room brings you quick conversations on hot topics in HR and HR technology. Co-host Chelsea Justice and I talk with guest experts about the challenges faced by the everyday workplace, as well as their solutions.

To be a bit self-indulgent, I love doing this podcast because it gives me the opportunity to talk with some of the most brilliant minds in the industry. In our first year, our esteemed guests have included New York Times best-selling author Cy Wakeman, millennial expert Adam Smiley Poswolsky, HR Bartender’s Sharlyn Lauby, futurist Jacob Morgan, author and Harvard professor Mihir Desai and of course, motivational speaker and leadership expert, Mark Sanborn.

Recommended episodes:

You can learn more about goings-on within the HR sphere by subscribing to HR Break Room podcast. Here’s to a year full of professional growth through podcasts!

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Posted in Blog, Featured, HR Management, Leadership

caleb.masters

by Caleb Masters


Author Bio:

Caleb is the host of The HR Break Room and a Webinar and Podcast Producer at Paycom. With more than 5 years of experience as a published online writer and content producer, Caleb has produced dozens of podcasts and videos for multiple industries both local and online. Caleb continues to assist organizations creatively communicate their ideas and messages through researched talks, blog posts and new media. Outside of work, Caleb enjoys running, discussing movies and trying new local restaurants.

Deadline Extended

Employer Deadline Extended for Furnishing 2017 ACA Forms

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Distribution of 2017 Affordable Care Act (ACA) Forms 1095-B or -C to your employees has been extended.

As issued in Notice 2018-06, the IRS has extended the deadline from Jan. 31 to March 2. (However, the deadline to provide Forms W-2 and 1099 to employees and contract workers remains as Jan. 31.)

Filing deadlines unchanged

While the deadline to furnish forms was extended, the filing deadlines remain the same: Feb. 28 for paper forms, and April 2 for electronic forms.

IRS Notice 2018-06 emphasizes that employers who do not comply with the due dates for furnishing or filing are subject to penalties under sections 6722 or 6721.

Good-faith transition relief extended

The IRS also announced the extension of good-faith transition relief. This may allow an employer to avoid some penalties if it can show that it made good-faith efforts to comply with the information reporting requirements for 2017.

This relief applies only to incorrect and incomplete information reported on the ACA forms, and not to a failure to file or furnish the forms in a timely manner. Additionally, the IRS stated it does not anticipate extending either the good-faith transition relief or the furnishing deadline in future years.

Contact a trusted tax professional if you have questions on how this may affect your business specifically.

Click here to read more about how the ACA is affect by the new Tax Cuts and Jobs Act.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

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Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio:

As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

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