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Unemployment Tax Planning: How to Avoid Common Mistakes

For many businesses, paying taxes means filing federal, state, and local income taxes. Many companies overlook unemployment taxes.  Because they are paid quarterly, it’s easy to forget in the middle of hectic day-to-day operations. There’s no media presence reminding organizations to pay these taxes. It’s up to businesses to ensure that these taxes are paid on time.

Unemployment Taxes

Employers pay federal unemployment taxes (FUTA) and state unemployment taxes (SUTA). Only Alaska, New Jersey, and Pennsylvania require employees to pay a state unemployment tax. The taxes are used to fund benefits for unemployed individuals. 

Taxes are placed in a trust fund that states use to pay benefits to qualified individuals. If a state has insufficient funds, it may draw on the federal fund to help bridge the gap. Each state is responsible for administering unemployment benefits.

Unemployment taxes are paid quarterly on dates established by the IRS. Failure to pay taxes on time can result in penalties and fines. Delays in paying these taxes may result in state or federal audits. To ensure that taxes or paid on time and in full, be sure to avoid the following common mistakes.

Poor Hiring Policies

Tax planning begins before a candidate becomes an employee. Unemployment tax rates are partially based on the number of filed claims. To ensure the lowest rates possible, businesses need to minimize the number of unemployment claims. That means hiring the right candidate. When evaluating potential new hires, make sure to:

  • Evaluate how well candidates fit the corporate culture. Include individuals from across the enterprise in the interview process. Diverse interviewers provide different perspectives on how a potential employee fits with the culture.
  • Vet a candidate. Companies must perform their due diligence when it comes to checking an employee’s background. In a rush to hire, critical pieces of information can be missed.
  • Define job requirements. Take the time to review the position requirements. Using an old job description can have unfortunate consequences. No position stays the same as technologies, markets and customers change.
  • Provide training. Making sure a new hire has all the resources necessary to succeed increases the chances of a good hire. It also serves as documentation should the employee claim they were not adequately trained.

No matter how comprehensive the hiring process, companies may have to terminate an employee. How the process is handled can impact unemployment tax rates. Offering outplacement assistance may reduce the time an ex-employee is out of work. Severance packages may also minimize the eligibility period. Knowing how unemployment taxes are assessed can help organizations make informed decisions on how or when to terminate employees.

Employee Misclassification

The most common misclassification is classifying a person as a contractor rather than an employee. According to the IRS, a person is an employee if:

  • A business dictates how, when, where, and how long a person performs job responsibilities.
  • An individual is reimbursed for expenses or is provided supplies or tools without charge.
  • An individual receives defined benefits such as insurance, pension, vacation, or sick time.
  • A business considers the position to be ongoing with duties critical to the success of the company.

However, there are other classifications based on residency status, type of work, and work location. With a growing gig economy, some states such as California are attempting to enact legislation that may change employee classifications. If successful, these state laws could impact employee classifications.

Miscalculation of Taxes

Calculating state unemployment taxes depends on the state in which the employee works. If a company has employees working in different states, the tax must be calculated and paid according to its regulations. Federal taxes are calculated according to the following:

  • Taxes are based on gross pay.
  • Taxes are applied on the first $7,000 per employee per year.
  • Taxes are based on a published rate.

For example, an employee is paid $1,000 per week before any withholding or deductions are made. The tax rate is currently 6%, so the amount of tax due is $60 for a total of $420 per year. 

The IRS, which controls the federal unemployment tax, does allow certain exemptions when calculating gross pay. Some of these exemptions include fringe benefits, expense reimbursements, life and health insurance payments, and employer contributions to retirement plans.

Late or Not Filing

 What happens if you don’t have the funds to pay quarterly taxes? File anyway. If tax forms are not filed, the IRS assesses a failure-to-file penalty. The amount of the penalty is 5% of the unpaid amount. The 5% penalty is charged per month until the balance is paid in full.

To avoid filing penalties, place the weekly amounts in a separate account. If the tax payment amount is maintained in a separate account, it is less likely to be used to pay for ordinary expenses. Even with a different account, businesses, especially in the startup phase, borrow from the account to cover the costs with every intention of paying back the “loan.” Unfortunately, the repayment doesn’t happen.

Instead of not filing, organizations should file and pay whatever they can. Companies can file for extensions or contact the IRS to negotiate an installment payment plan.

Poor Record Keeping

Businesses know to keep records to support their income tax payments. They also need to keep records to support how unemployment payments were calculated. For example, how was gross pay determined for all employees? What criteria were applied to determine employee status? When did raises go into effect? Answers to these questions impact the amount of taxes to be paid.

Proper record-keeping extends beyond tax payments. Human resources must make sure that complete records are maintained on all employees. This means tracking time off, recording training performance, and documenting disciplinary actions. These records can help dispute an employee claim for unemployment.

Not Using Professionals

Unemployment taxes are more complicated than many companies realize. Unlike the federal tax laws, states differ in how they collect and process unemployment taxes and claims. Keeping up with the tax laws can be overwhelming, especially if a business has employees in multiple states. Making sure your organization complies with state and federal regulations means finding knowledgeable professionals to help. If you need a partner to help, schedule a demo to see how our solution can take the worry out of unemployment taxes.

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What to Look For in Your Human Resources Business Solution

Human Resources continues to be one of the most essential departments in the business world. Without it, your employees wouldn’t have access to the proper tools they need to stay successful.

This is why your HR department needs smart business solutions to keep the workforce thriving. With the right technologies, your HR can help prevent turnover and create more engagement among employees.

However, if you feel like your HR team has slipped behind technologically, take a look at some key things to look for as major solutions.

Verification of Employment Solution

One essential task HR takes on is verification of employment. This also usually involves income requests, requiring considerable organization based on the complex data involved. You need top-tier tech solutions to organize it all, plus keep all that sensitive information safe.

Many companies outsource this task to third-party companies. Not all companies do a good job, especially if not more focused on comprehensive HR technology.

Your best solution is going through VeriSafeJobs, offered through Quentelle, and bringing more superior reporting capability to your operations. The use of VeriSafeJobs lets you enjoy advanced metrics, so all employment verifications are thorough. A smart and simple user experience also helps with learning curves.

It’s also worth noting that VeriSafeJobs has unmatched client support, so your HR team gets questions answered fast. Privacy is taken seriously with FCRA compliance.

Simplify Unemployment Claims

Your HR group already knows the complexity of dealing with unemployment claims through your employees. The process was once very protracted, leading to possibly exhausted HR workers keeping up the pace. Most of this resulted from adhering to filing deadlines, creating issues when sending claims by regular mail.

Now you can simplify it by using ValeU NSN, a partnering company with Quentelle. This works by digitizing the entire unemployment claims process. Your company should be able to send these claims electronically, so you never miss deadlines.

The result of this is getting a week’s head-start on claims, so they’re filed sooner. Response times are ultimately faster as a result.

ValeU NSN is made for Fortune 100 companies, though any-sized company finds benefits using this solution. Implementation should also be simplified when you work with the right consultant.

Reduce Unemployment Tax Complications

Your HR department probably wouldn’t argue that dealing with unemployment taxes is one of the most complex tasks they’ve ever done. A considerable burden here is the overly complicated tax rules in each state, usually creating inaccurate data.

Our partnership with ValeU Group provides more accurate figures, so you never have to worry about tax penalties again. The benefit here is Vale U Group has more extensive knowledge of state tax rates, hence having a real unemployment tax expert in your corner.

Expect them to hunt vigorously for errors and provide the most accurate reports. These are real state tax experts who work as outsourced advisors.

Working with them, you’re guaranteed accurate unemployment tax information. Plus, you gain a dependable consultancy team on all other tax matters.

Simplify Your WOTC Program

Taking advantage of tax credits is no doubt a vital part of your business. A WOTC program is beneficial not only for you but to those you hire who have barriers to employment.

Otherwise known as Point-of-Hire tax credits, getting WOTC set up can take a lot of time for your HR team. Much of this is the pre-screening process, not including waiting to sign the 8850 form.

Our partnership with Walton gives you access to quality tax credit experts who can save you more than if letting HR handle it. Walton simplifies the process by sending digital questionnaires your employees fill out. Based on their answers, Walton finds ways to bring double the savings possibly. 

Now you can speed up the eligibility pre-screening, plus get help with other tax credits you overlooked. Read about how our partnership with Walton saved a national grocery chain double the amount from what they initially thought.

Improve Your HR Analytics

Your HR staff likely already use analytics of some sort, but how detailed are they? Not all analytic programs are great at providing the granular information HR employees need to help other company employees. When HR doesn’t see the whole picture of what’s going on, it only frustrates those they’re trying to help.

Our HR analytics engine keeps your HR workers in the know. It all starts with tapping into big data and organizing it in the most efficient ways. You can expect to bring more optimal employee performance using a better approach to big data.

Improving this further focuses on utilizing artificial intelligence to compile all the large amounts of data coming in. AI has truly advanced tenfold from just a few years ago. Now it can help organize metrics in a truly more intelligent way. Best of all, AI scopes out business trends you probably can’t see without more help.

Rounding this out is our metrics platform is fully integrated into the HR solutions suite. This enables your HR team to access all data from one source rather than from disparate data silos. Accessing information all in one place makes for more productive HR workers rather than add to their stress.

Bring a Digital Transformation to Your HR Department

Based on the above tools, you can see that a digital transformation must keep up with business challenges in today’s times. HR duties are far more complex today than a decade ago. 

Finding the right technology is the biggest hurdle. Another challenge is finding tools that integrate, so HR workers don’t have to search from multiple sources to answer critical questions.

We take technology seriously at Quentelle, where our sophisticated big data program is now renowned worldwide. Through that, we’ve incorporated AI and other emerging technologies to help advance companies to new plateaus.

Customizing is also at the center of our mission since every company’s HR department is different.

Contact us to learn more about how we can improve your HR team’s work by scheduling a demo.

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News Update: Recent Changes to Point-of-Hire Tax Credits

On Wednesday, April 21, 2021, President Joe Biden announced a refundable tax credit available for select businesses that pay employees that need to take time off to get vaccinated for COVID-19.  This is part of the administration’s effort to involve employers to promote vaccination.

“Today we hit 200 million shots,” Biden said. “It’s an incredible achievement for the nation. I’m calling on every employer, large and small, in every state to give employees the time off they need with pay to get vaccinated,” said the President.

Here’s what we know about it so far:

  • The tax credit will apply to businesses with fewer than 500 employees
  • The tax credit amount equals up to two weeks (80 hours), limited up to $511 per day for each employee, and $5,110 in the aggregate at 100% of the employee’s pay rate
  • The tax credit is available between April 1 and September 30, 2021. 
  • Tax credit is refundable, meaning the employer is entitled to payment of the full amount of the credit if the tax credit amount exceeds the employer’s share of the Medicare tax
  • Employers can claim the credit on using IRS Form 941 – Employer’s Quarterly Federal Tax Return

This tax credit was authorized under The American Rescue Plan Acct of 2021 (ARP) which was signed into law on March 11, 2021.

 

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A Brief Guide to State Unemployment Taxes

Sifting through unemployment tax law is a difficult and time-consuming task. The heart of this problem is that each state has its own set of unemployment tax rules and regulations and is also subject to federal laws, which are standard across all 50 states. 

Interpreting unemployment tax law is a complex undertaking as it is; the COVID-19 pandemic has added multiple layers of complexity to the process. Now, with additional legislation like the CARES act and FFCRA, it can be challenging to know where to turn when you have questions about your company’s unemployment tax obligations. 

In this article, we’re going to look at the critical components of unemployment tax law, discuss how current Coronavirus relief legislation modifies those existing rules, and establish a list of quality resources that you can turn to to get your important questions answered.  

Unemployment Tax: Key Things You Need to Know

Unemployment tax was first established under the Federal Unemployment Tax Act (FUTA) of 1939. This piece of legislation, which was created in response to the Great Depression, has evolved to address the modern workforce’s needs. The law was designed to offset unemployment’s social and economic impact by placing a portion of the cost onto employers in general. 

FUTA funds unemployment by collecting a payroll tax. However, it should be noted that this tax is only levied against you as a business owner, not against your employees’ paychecks. While the amount of tax that the federal government collects has changed over the years with updates to the legislation, the way that the tax is assessed has remained the same. Through 2020, the tax rate was set at 6% of the employee’s first $7,000 in wages per year. That means that the employer takes 6% from a minimal, predetermined amount rather than the employee’s overall salary. It should be noted that the tax is not assessed on employees who make $1,000 or less per calendar year. Tax is also not collected on employees aged 21 or under. 

The basic method for figuring out your company’s unemployment responsibility is:

  • $7,000 x 0.06= $420/employee/year
  • $420 x total number of employees= unemployment tax obligation

The current FUTA standard also makes a provision for a 5.4% tax credit, which results in a tax bill of $42 per employee every year. To qualify for the credit, your company must pay state unemployment tax and file form 940 (which is a yearly requirement anyway) with the IRS.  

The challenge to employers comes with state unemployment taxes, as every state administers its own unemployment program, and imposes an employer-funded tax levy. Below, we’ll provide a more comprehensive guide to available resources that can help you determine the rules for your particular state.   

When figuring your unemployment tax burden, you should inquire if certain types of payments are excluded from the overall calculation. Those types of payments include:

  • 401(k) contributions
  • Life Insurance
  • Fringe benefits and per diem payments
  • Childcare allowances

Employers are required to pay their unemployment tax quarterly throughout the year.

A Wrench in the Works: the CARES Act

Along with the COVID-19 pandemic, there came a surge in unemployment cases nationwide. At one point, the US economy suspended or eliminated more than 22 million jobs. Several legislative remedies were passed into law, including the FFCRA, which extended the definition of emergency paid leave. The CARES act offered additional unemployment insurance up to $600 dollars per week. There is an old saying, however: there’s no such thing as a free lunch. 

While the CARE Act served as a lifeline for many struggling families, there are tax implications to receiving that kind of governmental assistance. Employees who failed to set aside taxes might find themselves without their expected refund. 

For employers, the CARES act results in additional paperwork and due diligence. While the federal government fully funds the unemployment insurance itself, each state has its own mechanism for carrying out the program, complete with qualification requirements and reporting. The bottom line? Unemployment tax is already muddy water; pandemic-related legislation just opened the floodgates.  

Resources to Help

So the burden of understanding unemployment benefits and their associated tax burden falls to the employer. But with each state in charge of its own rules —on top of federal requirements— that’s no easy task. Information differs on a state-by-state basis, and even then, it can be difficult territory to wade through. Where to begin? 

The single best place to start your search is with the United States Department of Labor (DOL). They have a page set up specifically for employers that links to each state’s unemployment insurance program. This site gives employers a contact list at a glance and helps empower HR and accounting staff to find good, quality information on a state level.

To understand how unemployment insurance —including the CARES act— works for the employee, the DOL also offers a website geared toward the workforce filled with valuable information and necessary forms.  

For information on federal unemployment programs, the top-level governmental website, USA.gov, has an unemployment-related directory filled with information related to numerous national programs as well as additional high-quality resources. 

If, for some reason, the government-curated resources don’t answer your question, or you find them obtuse and difficult to use, numerous third-party organizations such as the Tax Foundation strive to bring up-to-date information to the American workforce, including employers. 

Enlisting Personalized Help

Understanding tax laws is difficult no matter what type of tax you’re working with. There is no substitute for getting advice from a professional resource. The Quentelle platform is proud to partner with the ValeU Group to provide unemployment tax planning services through our technology and consultancy expertise. For more information, please contact us today. 

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Quentelle Names Mike McConnell Chief Operating Officer

Quentelle, LLC, is pleased to announce today that Mike McConnell, Vice President of Quentelle has been promoted to Vice President and Chief Operating Officer.

“Mike is a proven and trusted leader that consistently delivers results. His unique skills and laser-focused operational expertise will streamline and continue to drive operational excellence,” said Stephen Wain, Chairman & Managing Member of Quentelle. “Mike’s ability to pursue excellence while engendering organizational growth and results make him uniquely suited for this position. As Quentelle grows our leading software platform and associated offerings, Mike’s ability to help bring products and services to market will usher in new opportunities for our clients.” Under his new role, Mike will assume responsibility for operations, engineering, marketing, sales, and service; leading all efforts to streamline product delivery and customer services/experience.

Quentelle’s story has never been more compelling and relevant. It’s been amazing to see how our innovation has captured the hearts and minds of the customers and partners we serve,” said McConnell, “I am extremely excited to help lead the company to its next phase of innovation and operational excellence.”

“Mike has been instrumental in the rapid growth of our business and has delivered results and earned the respect of all members within our organization. I’m happy to work with Mike on the growth of Quentelle,” said Phil Ownbey, Quentelle’s President.

Prior to his appointment, McConnell was responsible for product deployment as well as marketing and service delivery. McConnell joined Quentelle in 2018 after selling a successful healthcare franchise business he founded Prior to that, he worked in various industries including manufacturing and defense electronics, spanning over twenty years. Michael earned a Bachelor of Science degree from Penn State University and is also a proud veteran of the US Armed Forces.

Headquartered in New Jersey, with staff nationally and worldwide, Quentelle is a business and artificial intelligence technology company, and the developers of ForeSite™, a data intelligence platform that allows third-party developers and their applications to provide state-of-the-art information as part of their applications. Quentelle is the developer of VeriSafeJobs™, a nationally recognized Verification of Employment/Income SaaS application that works under the ForeSite™ platform that services Fortune 500 and mid-size entities who require greater insight into the needs of their employees, as well as outside entities and government agencies. Quentelle works with information collected to provide actionable insights to enhance partner products and service offerings. Its platform works across many industries, and is currently working on areas such as HRIS, Medical, and Cybersecurity.

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Recruitment concept to hiring of a new talented specialists for international company. Handshake to sign in of employment agreement. Social media hologram icons over the table with documents

When Your Company and Employees Might Need Verification Of Employment

According to cnbc.com, 78% of employees lie during the hiring process.  Many of these falsehoods are on resumes.  Since it is not illegal to lie on a resume, most companies use some form of employment verification to ensure the accuracy of a candidate’s work history.  On the other hand, employers must comply with legal requirements when providing employment information on current or past employees.  

Verification of employment (VOE) requests can come from a number of sources:

  • Government agencies
  • Lenders
  • Collection Agencies
  • New employers

In most instances, they are looking for information on employment dates, wages, and the potential of continued employment.  Potential employers may ask for the reason for termination and the possibility of rehiring. 

What Information Should Be Provided?

Information requests fall into two groups:

  • Employment Verification
  • Income Verification

Each state has rules governing the information that can be released.  For example, some states such as California and New York prohibit employers from releasing salary information to potential employers.  The best option is to ask employees to sign a consent to release information form before releasing employee-specific data.

Federal law prohibits discrimination based on race, religion, color, sex, gender identity, age, disability, nation of origin, or genetic profile.  It’s essential that an organization have well-defined policies regarding VOE information to avoid possible violations.

Employment Verification

Potential employers want to verify that an employee worked at the companies listed in their work history.  Typical VOE requests ask for the following:

  • Employee Name
  • Employee Job Title
  • Employment Dates
  • Employer’s Address

In some cases, they may ask about job responsibilities or performance. Answering these questions during the hiring process can prove problematic.  It is recommended that employers only provide additional information after consulting with legal experts.

Income Verification

States vary on whether salary information can be provided during the hiring process.  Be sure to check with state regulations before releasing wage or salary information.  Employees may want employers to release income information as part of loan application processing.  Government agencies may need information if employees or former employees are applying for assistance.  Consider establishing a policy that requires employees to provide written consent to release income information.  

Circumstances that may require the release of income data may include:

  • Loan Approvals:  Buying or refinancing a home requires income data to ensure that the loan terms can be met.
  • Credit Applications:  Granting a person’s credit request depends on credit score as well as the ability to repay.  
  • Garnishment:  If an employee receives a court-ordered garnishment such as child support or back taxes, income information will be required to determine the amount of the garnishment.  
  • Lease Agreements:  Property managers may require verification of income to ensure the tenants can manage monthly payments.  

 Before releasing information, check with the employee.

When Should Information Be Provided?

The only time an employer must comply with a VOE request is when it comes from a government agency.  These requests will often be very specific and include a reference to a legal statute supporting the request.  The request should also have a comply-by-date.  If it does not, contact the issuing agency for clarification, although it is always advisable to respond to a government request as quickly as possible.

Government Requests

Government agencies may need to verify income to determine child support or alimony payments.  They may request information to help with possible identity theft or confirm fraudulent use of government funds or services.  As long as the information is accurate and given in good faith, an employer should not suffer any adverse effects.

Private Requests

Employers are under no obligation to release information to lenders or other private companies.  However, withholding that information places employees at a disadvantage.  With the number of attempts to steal identities, employers may want to require that employees notify them of potential requests.   Providing employees with a form to date and sign is an easy way to receive notification and signed consent for the release of information.

If contacted by a prospective employer, a current or former company should provide the basic information for employment verification.  Any information beyond the basic should only be provided with the signed consent of the employee.  In some instances, additional information may be needed for individuals working in industries such as education or health care.  Be sure to check with local authorities for guidance.

Third-Party Requests

Requests from third parties such as collection agencies should be ignored; however, employers should check with legal authorities to prepare a policy for handling requests by a third party.

When Should Health and Disability Data Be Provided?

All information regarding an employee’s health or disability status is protected by law.

  • The Americans with Disabilities Act of 1990 makes it illegal to discriminate based on a disability.
  • The Health Insurance Portability and Accountability Act of 1996 protects a person’s health information from release to unauthorized individuals.

Information related to an employee’s health or disability should never be released without consent. When to Get Help?

As a small employer, you may have a few routine VOE requests in a year — maybe every two or three years.  For larger organizations, the number of VOE requests can be significant, especially in times of high unemployment or a booming housing market.  Given the amount of processing time involved, the cost of in-house VOE can run into the thousands.

It’s not just the direct cost of an individual’s time but also the opportunity cost resulting from the person focusing on VOE responses rather than a solution with more impact on the bottom line.  If you’re interested in seeing how much Quentelle’s solution can save you, check out our savings calculator.  Then, contact us to schedule a demo.  

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What Are Point-Of-Hire Tax Credits And Other Tax Credits?

Tax credits are always important for businesses in the challenging times we live in. While WOTC (Work Opportunity Tax Credits) are still available on a federal level, Point-of-Hire credits are also available in many states.

What should you know about Point-of-Hire credits, though? Take a look at our guide on how they work and how much potential tax credit savings you can enjoy. 

We’ll also look at other useful tax credits to consider throughout the year.

You can also find recent updates on Point-of-Hire credits from Quentelle and we will work to keep you up-to-date as things change moving forward.

How Much Money Could You Save with Point-of-Hire Tax Credits?

The savings your business could muster with Point-of-Hire tax credits range from a few hundred dollars to as much as $35,000 per employee. It all depends on the state where this credit is available.

So far, these credits are only available in eight states: Arizona, California, Illinois, Louisiana, New Mexico, New York, South Carolina, and Washington. Time-frames for claiming the credit all vary based on your particular state.

In Arizona, tax credits up to $9,000 are possible for each new net quality job created. It works over a three-year period with $3000 in credit per year. Credits of up to $9,600 are available to employers in California, with the renewal of WOTC credits occurring recently.

A list of other credit savings possible in states participating in Point-of-Hire credits:

  • Illinois: Tax credit equal to 40% of first-year wages if employees work more than 400 hours. In the second year, this credit goes up to 50% while working the same hours.
  • Louisiana: A 25% tax credit ($1,500) of qualified first-year wages for employees working 120 hours. This goes to 40% ($2,400) for employees working 400 hours or more.
  • New Mexico: Credits here are 40% on first $10,000 wages in the first year, then 50% of the first $10,000 earned in the second year.
  • New York: $1,500 is available in credits here to individuals who worked at least 120 hours, followed by $2,400 when working a full 400 hours.
  • South Carolina: Credits between $2,400 to $9,600 are available, with no limits on how many employees your business hires in a year.
  • Washington: Each qualifying hire here can get a credit up to $2,400, plus $9,000 for long-term family assistance recipients.

What is a Welfare-to-Work Tax Credit?

More federal tax credits are available beyond WOTC and the limited Point-of-Hire credits. The Welfare-to-Work credit is still a popular option since it helps bring businesses credits hiring those on government assistance.

In a more challenging time economically, this type of credit can bring a real sense of accomplishment in helping to reduce unemployment in America. What makes it so effective is it was enacted at the same time as WOTC back in 2007.

Using both of these tax credits can end up being a major benefit to your company in any tax year. Both are likely to stay active on a federal level indefinitely.

What Tax Credits Benefit Employees?

There are several different types of tax credits that can benefit the employees of a company and help them maximize their income. Informing employees about these tax credit opportunities not only increases their net earnings but can also help businesses retain financially satisfied employees.

Earned Income Tax Credit

Employees can take advantage of an EITC if they earn a low to moderate-income. It works more like a refundable tax credit for your workers, except it sometimes delays tax refunds.

Any delays on usual tax refunds with this credit are due to an IRS law requiring a bit of a wait. Still, it’s very beneficial for lower-wage workers in your company. Keep in mind employees with children are the ones who stand to get the biggest credit.

For 2021, credit ranges on an EITC go from $543 to $6,728, which is contingent on filing status and how many children a family has. One great thing about the EITC is employees can get credit from the last several years if they didn’t realize they qualified for it over that period of time.

Lifetime Learning Credit

Many of your employees may be seeking an education while working for you. If so, they can get a Lifetime Learning Credit. These go up to as much as $2,000, giving significant savings for your valuable workers.

Part of that education they’re getting might be related to bettering their own jobs. Obtaining credits on tuition and any other education expenses greatly benefits them, or their spouse. An employee can also use this on a dependent.

Individuals can take this credit if their educational expenses are at least $10,000. On an income level, an individual has to make under $69,000 to officially qualify.

The credit goes beyond ordinary tuition and allows one to also write off any additional fees associated with getting an education.

Saver’s Tax Credit

Another great tax credit is this one where employees can help save more money for retirement. It all depends on their adjusted gross income requirement. As with EITC above, this credit is designed for those with lower to moderate incomes. At one time, this was known as a Retirement Savings Contributions Credit.

To use this for 2021, a head of household can get 50% of their contributions if making under $29,625 per year. A married person filing jointly can also take 50% of contributions if making $39,500 or less.

Employees can’t take any credit if they make more than $49,500 as a head of household. For a married person, no credits apply if they make more than $66,000.

What if You Have No Tax Liability?

An interesting thing about federal tax credits is some of your employees can still take advantage of one if not owing taxes. They might still qualify for $1,000 in tax credits, meaning they could get a $1,000 refund as a result.

While these scenarios are rare, it might occur if having employees who are volunteering at the moment rather than taking direct pay.

Always remember that to claim any tax credits, you need to fill out Form 1040 at the IRS. Schedule EIC is another form to fill out if claiming the EITC and listing dependents.

Do you need to learn more about Point-of-Hire tax credits? Contact us at Quentelle to learn about our platform. Click here to learn how you can schedule a demo.

 

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Verification of Employment: Why It Matters

Trust is one of the most important things between an employer and employee. It’s vital that you, as an employer, be able to trust each member of your team to accurately represent their capabilities and perform at that level. Just as it’s essential that employees can trust their employers to provide a stable, safe workplace and reliable paychecks. However, trust doesn’t come from no-where. It is built during the hiring process. A big part of that is verification of employment (VOC).

When you meet a candidate for the first time, your judgment of them should be a blank slate.  They could be your next all-star team member, or they could be someone with a spoofed resume and a few interview buzz-words to throw around. While interviewers are only human and can be fooled by impressive false employment history mixed into legitimate resumes, verification ensures that you pick the right person every time.

Verification of Employment:

  • Increases hiring accuracy and future candidate success
  • Creates accountability among the professional workforce
  • Gives you a real insight into candidate experiences
  • Avoids the risk of misinformed hiring decisions

Why Verification of Employment is Important

There’s no denying that accurate information about job candidates is essential. Knowing a candidate’s past job history can reveal insights into what they can do, what they have experience with and even the work cultures they are familiar with. It can show you, someone who’s risen through the ranks, remained solid in what they do, someone who is brand new with potential, or an old-hand looking for a new home. But inaccurate job histories, therefore, can lead to misunderstandings and even dangerous over-estimation of a new hire’s capabilities if those inaccuracies become successful deceit. This is why VOE is essential for finding good hires, but why is it also so pervasively necessary?

Why Professionals Write False Job Histories

The challenge is that many hiring industry flaws can lead to an inaccurate resume.

1. The Resume Padding Tradition

First, millions of professionals today were taught by their first (and later) job coaches to “pad” resumes a little to make them look better to a new employer. It’s one thing to choose bullet-points over paragraph form or list charity work as past employment. It’s another to fabricate employers, roles, and job duties, but many well-meaning people were misdirected to do this. Resume-padding can vary from mild upgrades in job-title to completely falsified past experiences. Some are trying to cover job gaps or avoid awkward questions. All of these types of resume-padding are extremely common, and professionals are often trained not even to see this as real deception, just actualized ambition.

Resumes padded in this way may indicate a valuable employee who just needs re-coaching in how to accurately write a still-flattering resume.

2. The Rare Con-Artist

Second, there are always a few people who intend to be deceptive. There are those who would rather a high paycheck and eventual failure over legitimately earning a job with their real work history. There are truly deceptive people who are looking to scam a few good paychecks out of a job they’re not qualified for. Most people are earnest and genuinely want a good-fitting job but maybe misled about how to write a resume. But every hiring manager must stay on their toes for the occasional true con-artist coming through the candidate process with a falsified resume and interview buzz-words.

Resumes found to be fully falsified, naturally, are a bad sign for the candidate as a new hire.

3. The Over-Confident

Third, we commonly see candidates who are very confident in their abilities even if their real job history doesn’t reflect the assumed capability. Optimistic and over-confident candidates are more susceptible to resume-padding than most. Those with a less solid grip on professional ethics and those who have been tragically mis-trained in job-seeking are inclined to fabricate the employment experiences that will “win” the job they want. These candidates may approach their resume more like a magazine essay contest, where the most confident interviewer with the best-written fiction may win the job.

Over-confident resume fabrication can be re-coached, depending on the nature and extent of the deception and – often – the age of the candidate. Very young candidates who have misunderstood the process may not be poor hires in the long-run.

4. The Recruiter Resume Deception

The fourth, final, and most frustrating source of falsified job histories is recruiter services. You may have seen this before or have been lucky in your employer-recruiter partnerships. However, the nature of the recruiter industry can lead to some deception. Consider that recruiters (independent and companies) are often paid for a stack of resume recommendations, provided the resumes are well-suited to the roles. Recruiters have been known to use more than a few underhanded tactics to get this commission. In addition to poaching attempts and dummy job listings, some recruiters will also add “keywords” to a candidate’s resume or fill an employment gap with an extended or fake work history. Often, candidates don’t even know that their resumes have been altered before submission to the employer, so falsified resumes from recruiters should result in consultation with the candidate instead of disqualification.

The Right Way to Verify Employment

There are several traditional and technological ways to approach employment verification. The old-fashioned way is to call the employee’s past managers and confirm their employment, role, and performance over the phone. However, with limited time, availability, job politics, and teamwork deception, this approach has a few informational flaws for absolute verification. It’s time to turn to technology.

Today’s hiring managers are looking to the information age and industry software for solutions. For the real report on a candidate’s job history and work experience, you need a service you can trust to provide accurate, discreet resume confirmations. Verification of employment is essential for accurate and successful job hiring. Contact us today to find out more or consult for a quote on your company’s VOC needs.

 

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Hand working with a Cloud Computing diagram

Faster, Safer and More Efficient: The Important Benefits of Cloud-Based Business Technology Platforms

More and more businesses are switching to cloud-based software partners to better manage their HR, payroll, taxes, and other critical aspects of their corporate infrastructure. In fact, the market size for cloud-based technology platforms and universal data integration is growing at unprecedented rates, with the industry set to more than double by the year 2025. 

The key factors driving this rapid transformation are the numerous benefits — for both the business and the employees — that come with implementing a cloud-based platform. Whether you’re a CHRO or CFO, understanding these critical advantages can help you to determine better when, not if, your company should make the transition.

Human Resources Management Systems For the Modern Business: What Is Cloud-Based Technology for Operations Management and Human Resources?

Over the last few decades, best practices for managing day-to-day business operations — from human resource issues like employee screening to payroll tasks like employment verification requests — have evolved considerably. 

Gone are the rooms filled with boxes, the filing cabinets stuffed with employee files, and the stacks of forms that need to be filled out manually. 

Yet, many companies are still using fragmented software ecosystems: One platform for unemployment tax planning. Another service for managing employee screenings. A separate tool for cybersecurity (approximately 80% of businesses have suffered a cybersecurity incident in the past 12 months, warns Security Magazine). And so on and so forth.

Cloud-based technology platforms combine all these aspects of your business into one system, creating a more holistic approach to data integration. When you transition your business operations and software to a single unified cloud-based approach, you and your staff have a single point of reference for all your essential business management tasks. 

And because it lives in the cloud (i.e., a secure, protected off-site server instead of a local, physical hard drive in your office), keeping different files and data updated and secure across teams, departments and locations are effortless. 

This can create several specific benefits for your organization, no matter your industry or niche.

The 5 Benefits of Cloud-Based Technology Platforms for Today’s Modern Corporations

1. Improved Efficiency

When your data is combined on the cloud, your team no longer has to shuffle through reams of paperwork, chase down the latest version of an employee file, or ask different departments what the status is on a tax document. 

Instead, everything is accessible on-demand to those who need it:

  • Data is updated instantaneously.
  • Files and information are accessible anywhere and at any time.
  • Paperwork, such as tax documents or payroll records, can go entirely paperless for improved employee productivity.

If another employee needs to see a file or a different department is auditing something, those involved can rest assured that what they’re seeing is current and up-to-date.

This enhanced efficiency can lead to:

  • Improved employee morale
  • A reduction in costly errors
  • Enhanced productivity so your team can focus on more important work.
  • Cost savings across the board

2. Plug-and-Play Scalability

With a unified approach to data integration, apps and services can integrate directly into your cloud-based platform to meet your business’ growing needs. You can finally say goodbye to dreaded IT questions about software installations, updating a version of a specific tool, different departments using incompatible systems, etc. 

Take employment verifications as one example. As your business expands, your team will steadily become inundated with more paperwork regarding employment verification. 

In one Quentelle case study, a payroll director at one Fortune 500 said their staff was spending a “vast amount of time dealing with verifications each year.” With a cloud-based platform, this company was able to integrate quickly with a cloud-based employment verification provider. Within a year, the case study client saved thousands of hours of employee time.

3. Faster Innovation

Continuous software licensing and technology upgrades can be costly, yet ignoring updates can leave your business open to security threats or locked out of innovative new features. 

A unified, cloud-based platform ensures upgrades and deployment of said updates can be instantaneously and conveniently rolled out across the board, helping your business better adapt to a continually changing environment.

4. Increased Security

According to Security Magazine, nearly four out of 10 C-level executives said that cybersecurity problems negatively impacted their company’s ability to attract new customers.

Local servers and drives need constant patches, updates, and maintenance to protect your team’s data and customers’ information. But it’s not just about malicious viruses or unscrupulous hackers. Security threats can even come down to human error: 

  • A shared computer where an employee forgets to log out of something
  • Someone is accidentally deleting important data.
  • A power outage that wipes out your computers

Cloud-based computing with the proper cybersecurity best practices and protocols offer:

  • Constant data backups 24/7/365 security monitoring and network management support 
  • Disaster recovery and backup 
  • Audits and assessments to identify potential risks to your business
  • And more

5. Smart and Savvy HR Insights

The wisest business decisions are built off of smart, strategic business data. Yet, in traditional non-cloud environments, data lives on so many different systems that it can be challenging to decipher the right approach to a problem or situation. 

The best cloud-based platforms for HR and payroll professionals offer predictive analytics using artificial intelligence. Because all the data is unified in one system, the AI can provide powerful insights to drive the boardroom’s decision-making processes.  For instance, Quentelle’s cloud-based platform has built-in AI that compiles and analyzes your data to help you to spot trends and patterns to improve operational effectiveness. 

Is Your Business Ready to Access These Benefits?

At Quentelle, technology and innovation are our team’s passion. Our cloud-based platform offers you a secure and convenient approach to unified data integration. Our proven solutions powered by advanced technology include:

  • Unemployment management claims 
  • Tax planning 
  • Point-of-hire tax credits 
  • HR analytics 
  • Cybersecurity 
  • Employment verification 
  • And more!

We’ve worked with everyone from small businesses to global conglomerates to transition their teams to cloud-based platforms. And we would love to work with you. To learn more about the benefits that cloud-based technology platforms can bring to your company, schedule a demo today!

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Man pressing a lock icon implying he is securing his data

Action: What Can You Do to Prevent Cyber Threats?

Despite the constant threat of a network security breach, far too many small business owners are ill-prepared to withstand the damage that a cyberattack brings. A staggering 43% of SMBs have no plan whatsoever to defend against or mitigate the effects of a security breach. Even worse, 60% of SMB owners do not acknowledge the risks in the first place. 

Fortunately, there are a number of small-scale interventions you can take to help protect your assets. 

Set Up Appropriate Employee Access

Not every employee needs access to every element of your network. Setting up user-defined roles can pay dividends in the long run. Take the time to make sure each employee has access to the systems they need in order to do their job, but restrict access to functions that fall outside their job role. This can help to mitigate human error. 

Perform Regular Software Updates

We’ve all been subject to mandatory, automatic updates on our personal computers. Many people choose to turn off or delay those updates when it comes to their personal, home computer system. Those updates are essential for system security purposes, however, and they are doubly important in a professional capacity. They can help bolster system security against the ever-evolving world of malware. 

Encrypt Sensitive Data

Never leave critical customer information or financials out in the open. Using an encryption method can help prevent potentially bad actors from utilizing your information should they get ahold of it. This is especially important if you are sending information across networks to clients, vendors, or other business partners. 

Employ Email Filters

Phishing scams derive their power from convincing your employees that malicious emails are from a trusted source. On the surface, emails like this may look like they are from a known source when there may be subtle, telltale signs that they are not. An email filter can help catch fallacious pieces of mail, helping to eliminate employee error from the equation. 

Educate Your Staff

They say that the best defense is an offense. The most surefire way to mitigate the risk of cyberattacks is to diligently train your staff in best practices. Employee awareness can go a long way in keeping your company safe from hackers and malware. 

Enlist an Enterprise Solution  

Cybersecurity threats are unfortunately common and incredibly varied in their method of attack. The average small business is extremely susceptible to attacks. Sometimes a small business owner can make all the right moves, employ industry best practices, and engage in proactive employee education and still incur a costly and damaging digital attack. Sometimes the only choice is to recruit a professional partner to help implement an enterprise security solution. Quentelle can help your small business set up security monitoring, network security, and email protection. Please contact us today to find out more about our services. 

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