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Awareness: Protecting Your Business From Cyberattacks

You may think that it can’t happen to you. You’re just a small business owner; what could you possibly have that would entice a hacker? A lot as it turns out.  Did you know that more than 43% of all cyberattacks are aimed at small to medium-sized businesses? In fact, Forbes even puts that number as high as 58%. The average small business owner cannot afford to turn a blind eye toward digital threats. They have just as big a stake as larger, more well-protected companies. 

SMB Cybersecurity: Some Alarming Stats

It’s not just the frequency of attacks aimed at the SMB sector, it’s the disastrous and long-lasting damage that they cause. 60% of businesses unfortunate enough to get caught in an online breach close within a half a year. That’s because the average cost of a successful cyber attack on a small business is $200,000, although that number can range into the millions based on the nature of the business as well as their market. 

It’s a problem that isn’t going to go away anytime soon. During the past year, filled with a near-continuous stream of turbulent ups and downs, cyber crimes against small businesses increased a staggering 424%. Small business owners need to prepare themselves for the reality of a breach, but the disheartening truth is 47% of all SMBs have no idea that they even need to be concerned about a cyberattack. 

Education and awareness are the keys to protecting your company and its assets. 

Types of Cyberattacks

What constitutes a cyberattack exactly? Perhaps SMB owners refuse to acknowledge the presence of digital dangers because the terminology is so vague. Your SMB is vulnerable to an incredibly-wide range of attacks. 

Malware

By far the most common type of cyberattack comes in the form of malware. Malware literally means bad software, and is a catch-all term for malicious code and software that worms its way into your company’s network. Malware includes:

  • Ransomware
  • Computer viruses 
  • Spyware

Malware is designed to obtain sensitive data from your company’s systems or hijack an aspect of your network. For example, ransomware will encrypt important data, requiring that you pay a fee to regain access. 

Phishing Scams

Phishing scams usually use email as their avenue of attack. This scheme involves fooling the recipient into believing that the email comes from a familiar, reputable source. Phishing emails use perceived familiarity to get the recipient to divulge sensitive info such as passwords, login credentials, and financial information. 

DDoS Attacks 

In recent years, a new type of cyber attack has surfaced: the Distributed Denial of Service (DDoS) attack. A DDoS attack involves an abnormally-high number of network requests being sent to a central server from multiple points of origin. The goal is to overwhelm the server and crash the network, disrupting your business’s ability to operate, resulting in lost revenue. 

SQL Injection

For a skilled hacker, an SQL (Structured Query Language) is an incredibly easy exploit to pull off. This type of attack involves sending a malicious piece of code —sometimes through a pathway as simple as an internet search query— that gives the hacker access to read, update, and delete sensitive data on a network. While the coding necessary to achieve this is complex, the avenue of exposure is fairly straightforward. 

Employees as a Liability 

Regardless of the cyberattack’s method, it’s important to keep a critical eye on your employees. The unfortunate truth is that 52% of data breaches come as a result of employee error. Malware and phishing scams are by far the most common types of attacks. 

Phishing scams are the equivalent of a digital conman; they use familiarity and manufactured reputability to entice employees to click harmful links or download damaging attachments. Through gullible employees, hackers are able to steal sensitive data or insert malicious software into your system. 

In order to combat the legion of scams circulating the internet, it’s necessary to view your employees as a digital liability —at least where cybersecurity is involved. If you start with that basic mindset, you can easily take remedial and proactive measures to protect your company’s assets.   

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Transforming Your Unemployment Claims Management

As an employer, you’ve experienced the frustration of working with a government agency.  You’ve paid federal, state, and local taxes.  You’ve worked through the paperwork for worker’s compensation and unemployment claims.  Some days, you think what could be worse?  

How Does the Unemployment Insurance Claims Process Work?

Unemployment insurance was created as part of the Social Security Act of 1935, and it has remained fundamentally the same for the last 85 years.  Although Congress created the program, its implementation was left to the individual states.  As a result, each state has its own state unemployment office.

Filing a Claim

When people apply for unemployment, they must meet state-specific requirements before they can receive benefits such as:

  • They are actively looking for work.
  • They have completed a waiting period.
  • They were laid off. 

The claims process was originally an in-person, paper-based process.  Although some states transformed their operations, most offices follow the same procedure set out in 1935.  The only difference is the paper has been replaced with electronic copies.  

Reviewing a Claim

The state is responsible for granting or denying an unemployment claim; however, they do inform the claimant’s most recent employer that a claim has been filed.  The employer can contest the claim or let it stand.

  • If the claim is legitimate, employers do not need to take further action.  The state will issue a determination letter to employers and claimants, indicating the decision.  
  • Employers may contest the claim by responding to the notification letter within the specified timeframe.  Failure to respond may result in a forfeiture of the right to contest.

Contesting a claim requires documentation such as employment start and end dates, compensation, and job title. Payroll records and personnel files may be required.  Once the state has reviewed the information, it will issue a determination letter notifying the employer and claimant of the decision.

Appealing a Decision

Both the employer and claimant have the right to appeal a decision, but the appeal must be filed within a designated period of time. Appeals mean more documentation and additional filings.

Paying a Claim

As an employer, you begin paying for UI claims the moment you hire an employee.  Employer-only taxes are collected at the state and federal level for each employee.  The federal rate is fixed, but states determine an employer’s tax rate based on industry, experience, and the number of employees claiming benefits.  The more claims, the higher the rate.

How Could the Unemployment Claims Process Work?

Transforming the claims process requires a return to the original objectives of the unemployment insurance program.  Its purpose was to deliver financial assistance to the unemployed through prompt payment of benefits.  In-person safeguards were used to reduce fraudulent claims.  Today’s advanced technologies make it possible to expedite claim processing while protecting employers and UI agencies from system abuse.

Filing a Claim

Unemployment agencies use the State Information Data Exchange System (SIDES) to facilitate the electronic transfer of claims and associated documents.  Instead of sending notification letters through snail mail, agencies can deliver filing documentation to the employer electronically.  No time is lost in transit, giving the employer the maximum amount of time to prepare a response.  The computer-to-computer interface not only expedites the initial filing, but it also reduces the number of data-entry errors that can occur.

Reviewing a Claim

With an automated claim processing solution, the digitized information can be evaluated using artificial intelligence and machine learning.  By deploying rule-based technology, automated solutions can perform the following:

  • Contest questionable claims
  • Respond to inquiries within state-issued deadlines
  • Verify claim-provided data

When discrepancies occur, the system can flag the claim for intervention.

For employers with employees in multiple jurisdictions, an automated solution can reduce processing errors.  The system can ensure that:

  • No deadlines are missed.
  • All information is provided.
  • All legal considerations have been addressed.

Without advanced technology, UI staff could be inundated with changes in state-specific requirements.  Something as simple as an address change can derail the entire claim process.

Appealing a Decision

No matter who appeals a decision, employers will need to provide additional information.  A digital solution ensures that all documentation from the notification letter to the appeal request is in one location, making it easy to access.  Employees no longer have to search files, sort emails, or scour directories to find information.

Paying a Claim

Once a claim is approved, many companies consider the process complete and rarely, if ever, revisit a UI claim.  Given the workload associated with the process, it’s no wonder that employees lack the time to check each approved claim.  Yet, it is crucial that payments are monitored on an ongoing basis.  

The state rate (SUTA) varies from one jurisdiction to another, as does the method for calculating what SUTA an employer owes.  In most instances, the more an employer uses the system, the higher the tax rate.  A recent analysis by the Bureau of Labor Statistics found that the SUTA rate can increase nearly 30% after a series of layoffs.

Transforming the Process

At its core, digital transformation is the ability to use technology to change how companies operate and how they add value for their customers, employees, and business partners.  By deploying technology, organizations can become agile and better able to respond to business fluctuations.  With a platform-based solution, an enterprise can pivot and continue to process UI claims without disruption.

Automated solutions make it easier for businesses to realize faster processing times, reduce errors, and lower tax rates.  They also free employees to work on higher-value tasks that encourage collaboration and innovation.  Technology facilitates the growth of a digital culture that can sustain a digital transformation.  If you are looking for a UI claims management solution, contact us to schedule a demo.

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Human Resources Analytics: Important Metrics to Monitor

Understanding your HR data is important, especially if you have a larger number of employees. As employees come and go, it’s easy to lose track of why employees might leave and thus what you can do to reduce turnover. It can also be easy to lose track of other key metrics, such as job details.

So, what kind of HR metrics should you be monitoring, and how do you overcome the obstacles to proper analysis?

Obstacles to HR Analysis

The largest obstacle to proper analysis of HR data is that the data itself is often piecemeal and stored and maintained in multiple places. In many cases only partial data is stored. For example, separation reasons, which can be important for monitoring turnover, might just be filed in old employee files and forgotten unless the person applies to be rehired.

Other obstacles include a lack of understanding of the right questions that need to be asked, lack of a strategic plan, and lack of a “business case” to put the effort into this kind of monitoring.

What Metrics Should You be Monitoring?

Commonly, when people start using metrics for HR, they focus on employee performance. While this is useful for individual employees and for determining who should be promoted (or in extreme cases, terminated), employee performance is far from the only key indicator and might even be less important than others.

Here are some other metrics that you should consider:

  1. Retention. 

    How long do your employees stay in their positions? Is there a falling off after a certain length of time? Do you find employees are more inclined to quit at certain times of year (this could indicate a workload imbalance a bit before that time that is causing people to shop their resumes?

  2. Turnover. 

    How many positions do you need to fill in any given year? Where are they? Is turnover higher in certain departments?

  3. Separation reasons.

    This ties into both, but by keeping broad categories of separation reason in your main database you can get an understanding of why you are losing employees. Is it that you aren’t giving enough opportunities for advancement beyond a certain point? Are people leaving because their commute sucks and, if so, is there anything you can do to reduce the pain, such as putting in bike sheds?

  4. Job statistics. 

    Exactly what are people being paid in different positions is a key metric as it allows you to make sure you are compensating fairly. Keeping good statistics on every position in your company allows you to ensure that you are not disadvantaging certain employees, that you are competing well with other companies for talent, etc.

  5. Headcounts. 

    How many people do you have in each position, and how has it changed over time? This helps you spot over- and understaffing. (Turnover can also indicate this, as people are likely to leave if they are overworked, but also if they are bored). Headcounts are also essential for compliance.

Let’s talk a bit more about how these are important.

Turnover

Your general goal as an employer should be to keep turnover down. Training and onboarding new employees is costly in both time and money. New employees are also more likely to make expensive mistakes or upset your customers.

Keeping turnover down is thus vitally important to your business. This means keeping track of when and why employees leave your company. For example, if you have a really busy month and discover that staff tend to be more likely to leave right after it, this might indicate that people are exhausted and overwhelmed. You might save money in the long run by hiring temporary employees to take on some of the load.

If you have high turnover in a specific department, this could indicate everything from a bad supervisor to working conditions that are proving to be a problem. It can also indicate that salaries are not up to industry standard. This allows you to investigate, talk to employees, and see what you can improve.

Keeping track of separation reasons can also help reduce turnover and identify issues. In some cases, a separation is due to nothing you did (perhaps the employee is moving closer to their elderly parents). But in others there is an identifiable reason, such as conflict with a supervisor or coworker, an issue with the office, or pay.

Retention

The other side of turnover is retention. Knowing how long employees typically spend in a given position can help you plan both to improve retention and to predict hiring needs.

Knowing why people leave is important, but so is knowing why they stay. Data on why an employee chooses to remain can be collected during performance reviews. This can help with hiring (by helping you choose people who fit the company culture) and with spotting those likely to be long haulers. It can also help you extend policies that are helping retention.

Some employees are always going to be a bad fit, and while the ideal is to spot them before you hire them, this does not always work. Good retention metrics can really help, though.

Job Statistics

While turnover and retention are the most important metrics to track, you also need to look at other job statistics. First of all, you need to make sure that your hiring policies don’t look like you are favoring certain demographics. You also need to make sure that the salaries you offer are appropriate and competitive (which also means tracking metrics such as the local cost of living).

Keeping detailed records of each job helps you identify traits useful in hiring, improves your training programs, and allows you to improve in areas that help you attract and retain the talent you need.

Headcounts

If you have a lot of employees, headcounts become essential. This metric tracks the number of full and part time employees you have, as well as exempt vs. non-exempt and demographics.

As with job statistics, headcounts can tell you if you are hiring an appropriately diverse workforce. They also help make sure that you don’t misclassify an employee and get into trouble under Federal labor laws.

Keeping track of all of these HR metrics is a challenge, and many companies fall short. Quentelle’s award winning platform delivers HR solutions that can help you track and analyze these vital HR metrics, among many other things. Contact us to find out more and book a demo.

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Understanding Work Opportunity Tax Credits (WOTC) 

There are several Federal hiring incentive programs in the United States. One of these programs and perhaps the one with the longest tenure is WOTC, which stands for Work Opportunity Tax Credit. This program is designed to promote workplace diversity by hiring individuals who typically face barriers to secure employment.

More about WOTC:

The Work Opportunity Tax Credit provides a Federal tax credit to employers who hire and retain individuals from certain target groups. The goal is to increase workplace diversity and help people who have particular difficulty finding sustainable employment.  In the current version of the program, the target groups are as follow:

  • IV-A recipients. These are individuals whose  family is receiving TANF. To qualify, assistance must have been received for a 9-month period during the past 18 months.
  • Veterans whose families are receiving SNAP or who have been employed for four consecutive weeks or at least 6 non-consecutive months in the last year. It also includes disabled veterans.
  • Ex-felons hired within a year of conviction or release.
  • Designated community residents, that is people who live in select impoverished communities such as Rural Renewal communities.  To qualify, they must continue to live in those communities.
  • Individuals referred to Vocational Rehabilitation.
  • 16-17 year olds seeking summer jobs who live in one of the impoverished communities.
  • SNAP recipients. (Supplemental Nutritional Assistance Program – also known as food stamps)
  • SSI recipients. (Supplemental Security Income)
  • Long-term family assistance recipients.
  • Long-term unemployment recipients.

As you can see, the credit is a direct reward for hiring somebody who might otherwise have had problems finding and securing a job. It maxes out at the amount of business income tax liability or social security tax owed. It can be applied as a credit against business income tax liability.

What is Changing with WOTC?

Despite the rollercoaster ride 2020 has proven to be, we end the year on a high note. The 11th hour agreement reached by lawmakers on Sunday, December 20 will include a renewal of the Work Opportunity Tax Credit (WOTC)  through December 31, 2025.

The $900 billion COVID-Relief package, H.R. 133, “Consolidated Appropriations Act, 2021”  also includes host of provisions and programs within the bill, designed to provide relief to businesses impacted by the pandemic. The House of Representatives overwhelmingly voted to pass the bill 359-53 just hours after the final legislative text was released to members. The Senate followed suit by passing this bill with a 92-6 vote.

“Securing a long-term extension of WOTC was the right thing to do, as it ensures job applicants a chance to secure sustainable employment and gives companies an opportunity to find good talent and offset their corporate taxes as they recover from the impact of the pandemic.” said Phil Ownbey, President of Walton Management Services.  

While we hoped the renewal would also add pandemic-focused target groups, this extension does not include any changes to the program. However, this buys us some time to regroup and strategize our lobbying with the incoming administration.

Will the Pandemic Affect WOTC?

One key question is the potential effect of the COVID-19 pandemic and resulting economic disruption on WOTC. It’s clear that the pandemic makes extending the credit even more important. As the pandemic ends and recovery begins, encouraging employers to hire people who lost their jobs at the start of it and have been struggling since is likely to speed recovery, especially in disadvantaged areas.

The incoming administration has promised a better plan for dealing with the pandemic and depending on what happens with Congress, this could involve changes to WOTC. Two big changes might be considered:

  1. An audit of Empowerment zones and Renewal communities to potentially add towns and neighborhoods that have been particularly badly hit.
  2. The potential addition of more target groups. For example, COVID-19 is resulting in long-term sequelae for many patients, but most of these patients are getting better, if slowly. Many of these long COVID sufferers have lost their jobs and for those who do recover, finding new employment might be tough. Creating a temporary target group could be one way to assist them back into the workplace. Target groups might also be created to assist people in industries that were particularly hard hit.

Adjusting WOTC can be an easy way to incentivize employers to help bring back those who have been particularly hard hit by the pandemic, which has disproportionately affected minority communities.

How Do You Get WOTC?

Applying for the credit is simple, and there’s two ways to do it. In some cases state or local workforce agencies will provide qualified workers with a pre-certified form that they can give to you. Or if you believe your new employee falls into a target group, then you can fill out an individual-characteristics information form that explains how the person falls into a target group.

You then fill out a certification request form, obtainable from the IRS. It’s Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit. This must be provided to the state workforce agency within 28 days of your worker’s first day. Assuming that the request is approved by the state agency by way of certifying the employee, you will then be able to add the credit to Form 3800 as a general business credit. You will also need to file Form 5884. If you are tax-exempt, you need to instead file Form 5884-C to get a credit against employer social security tax.

Some employers find out about WOTC for the first time when a new hire shows their eligibility form, but the intent of the program is to encourage you to seek out people who need a job badly and bring in people you might not have thought to hire.

If you are looking for tax breaks and also a way to help bring new and interesting viewpoints into your office, the Work Opportunity Tax Credit gives you a solid incentive to hire less traditional employees. It is, however, complex to understand. Quentelle’s human resource bundle can help with this and other employment-related tax issues. Contact us to find out more about our human resources software and how we can help you simplify employment and tax issues, including all point-of-hire credits.

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Employee Needing Verification? Data Security is Vital

In 2017, one of the largest data breaches in history occurred, impacting 143 million US consumers. Data breaches are a regular thing, to the point where smaller breaches don’t even make the news anymore. They do, however, impact millions of people every year.

The fear of a data breach is a huge pain point for employers who have an employee needing employment or income verification. Data security improvements, however, can help both companies and employees feel comfortable when verification is needed.

When is Employment or Income Verification Needed?

Most employees rarely need employment or income verification, but when they do the need is significant and urgent. For the most part, verifications are needed to apply for a loan, when changing jobs, and when soliciting government assistance. Some landlords may also request employment and income verification as part of the tenant screening process.

It’s vital for employees that verification is done quickly and securely. The general process is that the lender or other third party will contact the employer and for verifications. This can lead to a potential security risk for your employee’s personal data, and because of this employers may often be reluctant to give any information.

Why Do Companies Outsource Employment Verification?

For small companies, dealing with very occasional inquiries can generally be handled by someone in Payroll or HR without much of an issue. Larger companies, however, typically outsource this function. There are a couple of reasons to do this. The first is that employment verification is a rote task that can be very time-consuming. The other is that a specialist can provide consistent information quickly. In fact, third party administrators have figured out ways to automate the completion of verifications, and report back to the employer on how many requests are coming in.

However, this also brings up reasonable concerns about data breaches. The companies handling this data are obvious targets, due to the number of records they are working with. There are also privacy and compliance concerns.

This means that companies need to choose a provider that is taking steps to secure the data and protect the privacy of the company and its employees at all times.

What Should You Ask Your Vendor?

There are a few things you should ask or check with a potential verification of employment vendor. The first is who is allowed access to their data. In some cases, vendors may allow unlimited access to certain third parties, such as debt collectors.

This is an obvious security loophole; avoid any vendor that gives unlimited access to anyone except government agencies as required by law. While debt collectors may be authorized to request information, nobody should be poking through the database without some checks.

Also ask your vendor what they are doing to comply with various privacy laws. For example, if you have employees in California, the CCPA applies. Make sure that your vendor covers every employee you have, even employees residing overseas. Be honest with a potential vendor about the locations of remote employees and make sure that they can handle your specific situation.

You should also talk to your vendor about improved security practices. For example, it is good practice to minimize the use of Social Security Numbers so they are stored in fewer places. You should also make sure that your own systems are kept patched and up-to-date.

Finally, make sure you know exactly how they are processing any personal data. Check reports regularly to ensure nothing odd is going on. You have a certain shared responsibility with them to ensure that data breaches don’t happen.

Be transparent with your employees and provide them with this information. In the past, employees have been surprised to be involved in a breach when they did not know that their data was being processed by a third party.

How Else Can I Protect My Employees?

First of all, make sure to choose a verification of employment provider who has not recently experienced a major breach or who, if they have, have been very transparent about how they intend to fix the issue.

Remember that whoever you choose will have access to your employees’ most sensitive information and that you hold if not legal, then at least ethical responsibility to protect that information.

Also make sure that your own HR systems are patched and secure and that all employees are trained not to give out sensitive information. If somebody calls asking for verification of employment, train all employees to redirect that person to your VOE vendor rather than giving anything out; an experienced provider will know how to ensure that the person is indeed authorized to get that information. Without that check it’s possible to give out sensitive information to, for example, a stalker.

If there is a breach, you are responsible for informing your employees and giving them advice on  how to prevent identity theft. At the very least, affected employees should freeze their credit report so that inquiries on their credit cannot be made without permission.

What Else Should You Look For?

Look for a company that has a good reputation and is getting good references and reviews. Make sure that they are known for being reliable and providing accurate information to both you and third parties requesting information. A mistake in employment verification can cost your employee a lot, especially if they are trying to purchase a home or take out another large loan.

Also choose a company that has a focus on cybersecurity. It should be one of the top things they talk about, along with accurate reporting. A company that also offers security services may be a good choice. Smaller providers may or may not be better, but can offer customized solutions that also help with payroll and taxes.

If you are looking to outsource verification of employment, one of your primary concerns is going to be the security of the data and the privacy of your valued employees. Quentelle offers the highest levels of security, having developed solutions after the large breach in 2017 designed to ensure that their clients are as protected as possible.

Contact us to find out about our VeriSafeJobs secure, automated verification of employment solution with powerful, accurate reporting, SOC I & II certification, and an easy to understand interface.

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