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Hiring Managers

Hiring Managers: Are You Tired of Your Inefficient Onboarding Solution?

There’s no question that the job market has changed drastically in the last eighteen months, and if we’re being candid, it shows no signs of going back to the way things once were. Now more than ever, it’s not only crucial that you find the right employees, but that they’re also onboarded into your company’s community and culture in a way that sets them up for long-term success.

As hiring managers, you have many critical responsibilities that rest on your shoulders, and in our experience, onboarding can be one of the most challenging tasks to manage efficiently.

This is also a pain point for many hiring managers who find that their onboarding solution isn’t always explicitly and clearly defined, which can lead to inefficient uses of time and resources. Every company is unique, and no two onboarding processes are the same, which can be challenging when trying to look for benchmarks and examples to model your own onboarding after. And since there are no “cookie-cutter” solutions that will be 100% effective, you’re typically tasked with building your own onboarding solution from scratch, or using whatever process you inherited when you became the hiring manager.

If you’re tired of your inefficient employee onboarding process, we’re here to help.

Why Onboarding is Critical

When you hire someone, you use an interviewing process to properly vet them to see if they’re a fit for your organization. However, once they’re hired, an unspoken thing that often occurs is that the employee uses the first week or two of a new position as an interview for you. Some people will even leave a job if the onboarding process seems lackluster, unorganized, or unprofessional. Think about it: the onboarding process is your first impression to show your employees that you’re a professional company that deserves their very best efforts and loyalty. It’s a sad truth, but many companies have an unstructured “seat of the pants” onboarding for new employees. If you had to honestly rate your existing onboarding process on a scale from one to ten, what would you give it?

Onboarding Software is What You Need

Think of all the software tools you use throughout your day–  there’s software that specializes in just about everything nowadays. You’d never dream of using a paper and pencil ledger when you have spreadsheet software that is far more powerful and quick at your fingertips. You need to take this same approach when it comes to your onboarding process. By using software, you can have a clearly defined, easy-to-use onboarding process that’s efficient and simple. Are you still using the equivalent of pencil and paper when it comes to your company’s onboarding? If so, it’s time to make the shift into the current age, and get rid of your inefficient onboarding solution.

Quentelle Provides Best In Class Onboarding Software

Employee onboarding is one of the most important ways to make an incredible first impression on anyone who joins your team. Here at Quentelle, we offer a smart and simple user experience while delivering the best HR software on the market. When you use our suite of intuitive tools to handle your onboarding tasks, you can rest easy that our award-winning software will make your job as a hiring manager far more efficient.

Our software is smart and simple, and we’d love to show you how it can work for you. Schedule a demo today by filling out a form, or giving us a call.

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What Is Covid-19 Employee Retention Credit ERC

What is the COVID-19 Employee Retention Credit (ERC)?

As a business owner, you want to ensure that you are taking advantage of every tax credit you are eligible to receive. While reviewing available tax credits and incentives, you may come across the COVID-19 Employee Retention Credit. This is a refundable tax credit that a business can claim on qualified wages to employees and certain health insurance costs. There have been several enhancements and changes to the program recently, so it’s important to stay informed of where the program stands today.

The ERC was first established under the CARES Act of 2020 in response to the effects the Coronavirus was having on struggling businesses and employment. This was an initiative passed by Congress to help businesses retain their employees and avoid layoffs. The credit originally could not be claimed by employers who also received a Paycheck Protection Program (PPP) loan). However, that subsequently changed, and those businesses are now eligible. With the ERC, employers could claim a tax credit of up to $5,000 for each employee that was paid between March 13,2020 and December 31, 2020.

Under the Consolidated Appropriations Act of 2021, employers could claim ERC for eligible employees quarterly instead of annually. The ERC maximum amount increased to $28,000 per employee that was paid in 2021. The American Rescue Act of 2021 had similar parameters as the Consolidated Appropriations Act of 2021 or CARES Act of 2021 with the caveat that businesses started after February 12, 2020 may not qualify.

Who is Eligible for Employee Retention Credit?

Under the American Rescue Plan Act, most employers, hospitals, universities, 501(c) organizations, and colleges could qualify for the credit. Your eligibility will be determined by the IRS during tax preparation. There are various factors that can go into eligibility.

Qualified Wages

Wages are those of full-time employees that were under your employment during a certain time frame. If you have, for example, over 100 full-time employees, you can claim this credit for the ones you retained and are not working. The current threshold is set at 500 full-time employees.

Claiming the Credit

To claim the credit retroactively, you must file Form 941-X, the adjusted employer’s quarterly federal tax return or claim for refund. There are other guidelines for previous years, but currently, we are awaiting the 2021 guidelines. Of course, you should always consult with your accountant or tax preparer to determine the best way to claim the credit.  Be advised that you will need to report your total qualified wages as well as related health-insurance costs. The credit can be taken against an employer’s share of social security tax, but it is typically refundable under normal procedures. You may also be able to request an advance or credit by submitting Form 7200.

Qualified Health Plan Expenses

Qualified health plan expenses are incurred by an eligible employer, who then allocates these funds to an employee’s qualified wages. They are used to maintain a group health plan and cannot exceed the employees’ gross income.

Call Quentelle with Your Questions Today

Quentelle’s HR bundle of services includes Tax Credits, Verification of Employment, and Unemployment Insurance cost control. To learn more about how you can maximize your company’s COVID-19 Employee Retention Credit, contact Quentelle online or call us at 888-565-5515 to speak with an expert.

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Employee Retention Credits

Employee Retention Credit: A Tax Break for Employers

The Employee Retention Credit (ERC) was rolled out after the passing of the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. It was a way for the government to encourage businesses to retain their employees on the payroll following the negative impact of the COVID-19 pandemic. The relief was extended from March 2020 to January 31, 2021. Eligible employers can claim certain payroll taxes against wages paid to their employees in the respective periods.

On December 27, 2020, the Consolidated Appropriations (CAA) Act 2021 was enforced under the CARES Act 2020, modifying the contents of the ERC. The new changes enabled employers to continue claiming the tax credits for another six months, running up to June 30, 2021. The program was again extended and will run-up to December 31, 2021, under the American Rescue Plan Act 2021. 

One of the key employee retention benefits is offering an incentive for employers to still pay wages. In 2021, over 30,000 businesses have already claimed more than $1 billion. However, more businesses still need to be educated, given that the program is guided by some laws and regulations which keep being updated, generating several complexities.

What is the Employee Retention Credit?

It is a fully refundable tax credit which an eligible employer can claim a percentage against qualified wages paid to employees. For 2020, employers can claim 50% of all qualified wages up to $10,000 per employee paid between March 13, 2020, and December 31, 2020. So, you can claim up to $5,000 per employee. This also extends to those who initially borrowed the Paycheck Protection Program (PPP) loans.

In 2021, the American Rescue Plan Act increased the claim amount to 70% of all qualified wages paid to each employee from January 1, 2021, to December 31, 2021. The maximum limit per employee is retained up to $10,000 ($7,000 for each employee per quarter) for any quarter.

What are the Qualifications for Claiming the Tax Credit?

The American Rescue Plan Act approves the credit for any employer, college, university, hospital, and tax-exempt organization as defined under 501(c). It also extends to those who borrowed a loan under PPP.

The Internal Revenue Service issues two requirements that make an employer eligible:

  1. Any business or organization that has experienced a partial or full suspension in their operations due to government orders during COVID-19.
  2. A business that has reported a significant decline in gross receipts.

Not all businesses qualify for the first requirement, including those supplying critical goods and the ones that could resume operations through teleworking. Under the requirement for gross receipts, many businesses qualify.

From March 2020, an employer can make a claim provided the gross receipts in a calendar quarter are less than 50% of gross receipts compared to the same calendar quarter in 2019. However, if the business reports an increase in gross receipts of more than 80% of gross receipts in the next quarter for the same calendar quarter of 2019, it no longer qualifies.

For 2021, employers should prove that their operations were limited due to government closures or quarantines, leading to more than a 20% reduction of gross receipts in the quarter compared to the same calendar quarter in 2019.

What are Qualified Wages for Claiming Credit?

These are wages inclusive of those subject to FICA taxes plus specific health expenses. You need to have paid them between March 13, 2020, and December 31, 2021. In addition, the IRS qualifies health expenses to include both the before-tax deductions from both the employer and employee.

The basis for calculating qualified wages is the number of full-time employees you have hired. IRS defines a full-time employee as one who has worked an estimated 30 hours per week or 130 hours of service each month. The number of full-time employees was updated from 100 in 2020 to 500 in 2021 under the CAA.

So, for 2020, if you had hired more than 100 full-time employees in 2019, you can claim a credit against qualified wages paid for services not provided due to government closure or decline of gross receipts. And, if you had 100 or fewer employees in 2019, you can claim on all wages paid to employees, including those hours not worked due to suspension or gross receipt decline.

In 2021, having more than 500 full-time employees 2019 allows you to include only wages paid to employees for non-working hours because of forced closure or reduction in revenue. If you had employed 500 or fewer full-time employees in 2019, you could calculate credit against wages paid to all employees during the COVID-19 period. Generally, the IRS offers detailed guidelines on the components of ERC intending to help employers get informed and organize how to claim the tax credit to reap the benefits.
 
Essentially, small businesses can retain their employees even if they are not working, although larger businesses are exempted. If you are an eligible employer, this is a form of tax benefit which reduces your tax obligations. You can also request advance payments from the IRS if the payroll taxes cannot cover the credit amount. 

Just note that the advances are limited to employers with 500 or fewer employees. Furthermore, you can still claim it regardless of borrowing a PPP loan but not at the same time. Employees are also able to sustain their living as they get to keep their jobs.

Taking Action

This is still a challenging time for any business, whether big or small, and the credit program acts as a great relief against the pandemic. It is an opportunity that the government wants you to optimize as it offers a significant tax break to run your business and meet your set goals. As technology solution experts, let us help you manage through the technicalities of eligibility and wage rules. Please contact us, so we can offer you the support you need.

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Business Man Looking at Employee Details

The Ultimate Employment Retention Credit (ERC) Guide

The Employment Retention Credit, widely referred to as the ERC, is a refundable tax credit program provided to small businesses by the government. The program is meant to help small enterprises subsidize the costs eligible employers pay their employees to aid employee retention.

Employers can now recover up to 70% of qualified wages through the program, including health benefit expenses paid to employees since the pandemic hit. However, the ERC program is complex, and the conditions have changed so much since its implementation, adding to the confusion.

Below, we break down everything you need to know about the Employee Retention Credit (ERC) program. We will take you through its importance, eligibility requirements, and how to mitigate the financial risks of keeping your workforce employed.

The Evolution of the Employment Retention Credit

The government enacted the ERC at the beginning of the pandemic to help more employers retain their employers as the economy was shaken. Since its enactment, three laws have brought about changes and expansion of the program. 

1. Coronavirus Aid, Relief, and Economic Security (CARES) Act 

On March 13, 2020, the CARES act was enacted for qualifying employers with 1-100 W2 qualifying employees. Employers could claim the credit against 50% of qualified employee wages paid between March 13, 2020, and December 31, 2020. The credit was allowable for wages amounting to $10,000 per employee annually.

2. Consolidated Actions Act (CAA)

The CAA established in December 2020 brought enhancements to the ERC. The most notable changes include an extension of the coverage period to cover the first two-quarters of 2021 instead of ending in December 2020. In addition, employers with 1-500 employees now qualify and can claim credit tax on 70% of qualifying wages up to $10,000 per applicable quarter.

3. American Rescue Plan Act (ARPA)

According to the ARPA, employers can claim up to 70% of qualifying employee wages or a maximum of $7,000 per employee for every quarter. This is applicable for two more calendar quarters between June 30 and December 31, 2021.

Who is Eligible For ERC?

An employer qualifies for employee retention benefits if they satisfy two primary requirements:

  1. They are faced with a significant decline in their gross receipts. To qualify in the tax year 2020, you must have experienced at least a 50% reduction in gross receipts compared to a corresponding calendar quarter in 2019. This changed with the CAA and ARPA seeing that now you qualify if you see 20% gross receipts compared to an identical calendar quarter in 2019 or the quarter you started the business.
  2. They are affected by a full or partial suspension of business operations due to government COVID-19 orders. You only qualify for the portion of the quarter when your business operations are disrupted and not the whole quarter.

Applicants who already received loans under the Paycheck Protection Program (PPP) still qualify for the tax benefits from employee retention. However, this is limited to wages that are not forgiven under the PPP. 

Fortunately, employers with PPP loans can maximize their ERC benefits by including all their eligible non-payroll expenses, such as operational expenses, rent, and utilities, in their PPP forgiveness report. Additionally, employers cannot use the same wage period to apply for both benefits.

The eligibility is also based on the number of company employees, which now ranges between one and 500 employees, excluding the employer.  

  • Employers with 500 or fewer employees can apply for ERC on all qualified wages paid to all full-time employees whether the employees were working or not during the particular quarter. 
  • Employers with more than 500 full-time employees ERC can only be levied on the wages paid to employees who were not working during a specific quarter due to a company suspending its operations or a significant gross receipts decline.

What Are the Qualified Wages?

According to the ERC, qualified wages are any compensation to part or all full-time employees for a specific quarter. These include qualified health plan expenses incurred by an employer. These wages must be subject to FICA taxes and paid after March 12, 2020.

Who Is a Full-Time Employee?

According to the ERC program, a full-time employee works at least 30 hours per week or 130 hours a month during any calendar month of 2019. The full-time employee equivalent for the ERC varies from the PPC forgiveness report.

How To Apply For ERC Credits

The ERC is fully refundable and applied after the deduction of employer Social Security taxes. Furthermore, you receive any amount of excess credit of your total liability for your Social Security taxes.

The IRS issued a Notice-2021-21 to provide employers with necessary guidelines on how to claim ERC credits. According to the notice, if you are eligible, you need to calculate your qualified wages, including your Social Security and Medicare taxes, and account for this credit on IRS File 941 Employer’s Quarterly Federal Tax Return.

You should also include any qualified family leave and sick leave wages approved under the FFCRA. Employers who have already filed their year 2020 taxes can utilize the File 941-X Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund to retrospectively claim their credits for the past qualifiable quarters when wages were paid. This, however, only applies to wages paid before December 2020.

Quentelle Can Help You Maximize Your ERC

If you are looking for help with the calculation of your ERC credits, look no further. Quentelle is here to provide you with tech-driven solutions for employment verification and point-of-hire credits. We use an advanced platform and employ the best practices to provide you with streamlined income and employment verification requests.

VeriSafeJobs is our world-class platform that not only gets the job done but also keeps your private data safe and secure all the time. With us, you do not have to worry about all the complexities of the ERC, as we will handle it all for you. 

If you’d like to find out more about how we can help you simplify your ERC eligibility or claim process, schedule a demo today to see everything our superior solution can do for you. 

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