January 2014 Newsletter

Welcome to the Four Point HR Newsletter

The Stay Interview

Most managers are familiar with the Exit Interview process as an interview that takes place after an employee turns in notice, and prepares to leave an organization.

A relatively new concept is the Stay Interview, which is a proactive approach to understanding employee concerns while employees are still working for the company.  Many of you will recognize the questions below as questions that you may have asked during a performance appraisal, or during an annual employee survey.

Think of the process as preventative healthcare for your company.  It allows you the chance to hold a face-to-face, one on one meeting, where an employee can be totally candid with you about his job, department, or the company.  It also has the impact of showing employees that you really care about their ideas, and that you want to be sure that they are happy in the work place.  Finally, it allows you to see the workplace from a different perspective, and the chance to address morale issues before you lose a valuable employee.

Our experience with Stay Interviews has been very positive.  If you have a manager in your organization that clearly gets along with all employees, and is a positive role model for your organization, considering asking this individual to hold a series of interviews with employees to better understand any issues that you may not be aware of, or that lie beneath the surface.

If your business is small enough, encourage all employees to participate.  It is important that the very vocal employees are represented, but you must also be sure that the quiet ones have a chance to participate as well.  Often those who are usually quiet, have the most to say in a one on one interview.  (Be sure that each employee has been with the organization at least 6 months.  Those who have shorter tenure are still learning the ropes and may not have a complete picture of the business.)

Typical Stay Interview Questions may include:

  • What do you like about your work?
  • If you could change one thing in your job, what would it be and why?
  • What is the number one reason you stay here at ABC Company?
  • What would make your workday more enjoyable?
  • Is there anything that you would change about the way the company operates?
  • Do you feel like we have positively recognized you for the work that you do?
  • What, if anything, would make you want to leave us?

Finally, be sure to hold a meeting of managers to review what is going well, and to discuss any employee concerns. Work as a group to find solutions that show the employees that you not only listened to their thoughts, but that you care enough to make changes where it makes sense for the business.

Company Wellness

Introducing a wellness program to your workplace can be as simple as replacing sugary snacks with fresh fruits. As our societal views on health and fitness are changing to a more proactive, integrated approach, this can fit in nicely with our team members’ behaviors at home and result in increased morale and energy levels at the office.

But, keep in mind that instituting an office wellness program requires a long-term strategy.   It starts with getting feedback from your staff. Here are a few additional tips from Nicole Bradford of ABC:

  • Start slowly. Prioritize what areas of wellness are important.
  • Take advantage of resources you may already have in place that support wellness.
  • Avoid doing too much too fast. Plan your approach.
  • Allocate enough resources-both people and monetary- to have a sustainable program

To get your own wellness program going, consider these suggestions:

  • Consider healthy locations for team lunches
  • Start a “meatless Monday” lunch program
  • Have a weekly healthy lunch potluck
  • Start a recipe exchange
  • Ask your local gym for a discount
  • Invite local experts like personal trainers, doctors and nutritionists to come in to talk to your team
  • Sponsor a fitness challenge
  • Ask the vending machine company that services your office to offer healthy snacks
  • Bring in fresh fruit for your break or lunch room
  • Consider on-site fitness classes

Keep in mind wellness programs aren’t for every office but annual employee screenings and health risk assessments can help in building and defining a program to better suite your workplace. Then, check in with your staffers regularly to assess the benefits of the wellness programs and identify areas for improvement.

Avoiding the Most Common Payroll Errors

In the coming year our payroll team’s goal is to tighten up our processes and procedures to provide our clients with better service and to encourage smoother processing days. With that in mind, we’ve noted the most common payroll issues.

Misclassification of Employees

Properly classifying employees can relieve frustration and confusion as well as avoiding delayed start dates. This is especially important when submitting data to and receiving data back from E-verify. Is the employee an independent contractor (1099) or an employee with tax deductions (FUTA SUTA FICA)? Is the employee paid on an hourly rate or salary? Is the employee exempt (no overtime paid) or nonexempt (overtime paid)?

Overtime

Your nonexempt employee is compensated overtime pay when they have worked an excess of 40 hours in a workweek at the minimum rate of time and a half their regular hourly rate. This can include some salary employees. Be sure that hours reported pay an overtime rate as appropriate.

Garnishment & Child Support

A wage garnishment comes in the form of a court order garnishing an employer to withhold your employee’s earnings to pay a debt. Timely new hire reporting and terminations are critical when matching child support garnishments and unemployment verifications. Not having this information could result in delinquent child support payments or unemployment benefits (if applicable).

Keeping these in mind when reporting information will significantly increase the speed limit on our highway of information as well as reduce the roadblocks along the 2014 way.

The Patient Protection and Affordable Care Act (PPACA)

Part 1 – History

The PPACA was passed by Congress and signed into law by the President on March 23, 2010 and the regulation is 2000+ pages.  As you can imagine, the 2000+ page Patient Protection and Affordable Care Act (also referred as PPACA, ACA, Heath Care Reform, Obamacare) cannot easily be explained in a short article but here are some of the highlights.

The main goal of the PPACA was to decrease the number of uninsured Americans as well as reduce the cost of health care in the United States.  The PPACA also put in place many regulations designed to protect consumers and lower the cost of private insurance.

The enactment of the PPACA represents the biggest change in the Health Care system since the 1965 passage of Medicare and Medicaid, consequently, the drafters of the legislation phased in the features of the law to give individuals, employers and insurance companies time to adjust.  The various provisions of the PPACA will be phased in over a period of 10 years, beginning in 2010 through 2020.  Some of the main provisions are:

Guaranteed Coverage:

This feature prohibits carriers from denying coverage because an individual may have a pre-existing medical condition, or age.  Everyone within the same age group and location must be charged the same premium – older people could not be declined primarily for age reasons.  Previously, carriers could charge a higher premium for individuals with high blood pressure, diabetes, cholesterol and height/weight issues.  A very popular feature is that young adults can stay on their parents’ policies until the age of 26.

Individual Mandate:

This mandates everyone purchase health coverage.  It is required that all individuals who are not participating on an employer-sponsored plan, Medicare, Medicaid, or any other public insurance program must obtain coverage or pay a penalty.  If the individual has a hardship or is a member of a recognized religious sect with an objection to health insurance that is exempted by the IRS, the mandate does not apply.  Additionally, the mandate does not apply to the following:

  •  Anyone determined to have very low income and coverage is unaffordable;
  • Not required to file a tax return because their income is too low;
  • Would qualify for Medicaid; but their state has not expanded Medicaid eligibility;
  • Are a member of a federally recognized Indian tribe;
  • Participate in a health sharing ministry;
  • Received a hardship waiver through a health insurance exchange; and
  • Are not lawfully present in the U.S.

Health Insurance Exchange:

Each exchange will serve as an on-line marketplace where individuals and small businesses can compare policies and buy insurance.  States have been given the option of not operating their own exchanges consequently; individuals will default to the federal exchange.  The initial open enrollment for the exchanges will run from October 1, 2013 through March 31, 2014.  Originally the deadline to purchase coverage for a January 1, 2014 effective date was December 15, 2013.   Because of the website problems associated with the initial rollout, the deadline was pushed back to December 24th.  Going forward, the open enrollment period will begin on October 15th and end on December 7th each year.  Low-income individuals and families, whose incomes qualify, will receive federal subsidies to purchase coverage via the exchanges.

Medicaid Expansion:

States that choose to expand their Medicaid program will be able to change the state Medicaid eligibility to offer Medicaid to anyone within 133%-400% of the federal poverty level.  As a point of reference– Medicaid is a state run program and Medicare is a federal program.

Lifetime/Annual Caps Banned:

Insurance carriers will no longer be able to set financial limits on the amount payable on an annual or lifetime basis for essential benefits.   Some of the essential health benefits outlined in the PPACA are preventive care, childhood immunizations and adult vaccinations, and medical screenings will be covered by an insurance plan without requiring co-payments, co-insurance or deductible.  Examples of such services include mammograms, colonoscopies. Wellness visits HPV testing, HIV screening and counseling, FDA approved contraceptive methods, breastfeeding support and supplies and domestic violence screening and counseling.  Also carriers must spend 80% of premiums on medical care reimbursement (85% for large groups) instead of administrative costs.

For Our Clients

North Carolina Withholding Tax

North Carolina has established a new mandate about their withholding tax.  All North Carolina employees in our system will receive the requisite forms from Four Point HR.

The North Carolina General Assembly recently enacted House Bill 998 that becomes effective for taxable years beginning on or after January 1, 2014. Under this new law, taxpayers may no longer claim a personal exemption for themselves, their spouse, children, or any other qualifying dependents. Additionally, many deductions and tax credits that impact North Carolina withholding tax are no longer available for tax years beginning on or after January 1, 2014.

As a result of this Act, every employer must have all employees provide a new Employee’s Withholding Allowance Certificate, either Form NC-4 EZ or Form NC-4. The new form must be completed by the employee and provided to the employer so the correct amount of State income tax is withheld for any payment periods beginning on or after January 1, 2014.

Please work with your employees to determine which form (Form NC-4 EZ or Form NC-4) is most suitable for their filing preference:

Form NC-4 EZ: We anticipate this new, simpler form will likely suffice for most employees.

Employees should use this form if they plan to claim the NC standard deduction and plan to claim no tax credits or only the credit for children, if they qualify to claim exempt status, or if they prefer not completing the extended Form NC-4. Employees should understand Form NC-4 EZ could still be used even if they plan to itemize deductions for their tax filing.

Form NC-4: Extended withholding form that may provide more precise withholding figures,

but will require historical tax return information and estimation of 2014 income

Payroll Corner

Monday, January 20 and Monday February 17 are Federal Reserve holidays. Clients with Monday pay dates will be contacted by their payroll specialist to arrange a Friday or Tuesday pay date for those holidays.