December 6, 2022
Hiring Independent Contractors in 8 Simple Steps
Companies hiring independent contractors usually have short-term projects or part-time work that need to be completed in a specific time frame, or work requiring subject matter expertise. To hire independent contractors, you’ll identify the work that needs to be done and decide on the qualifications a contractor needs to perform the job successfully. Then, if you opt to post a job on a website, you should prepare a job description—make sure you note the job is for independent contractors only. Finally, compile a list of interested contractors and screen the top applicants. Cost is also a significant factor, so determining an acceptable contractor budget at the beginning of the process will prevent you from wasting time considering those who are outside your range. 1. Plan Contractor Projects Before you make any major decisions about hiring independent contractors, consider whether you really need them or if an employee would be a better fit. Sometimes employers are penalized for misclassifying employees as contractors. Take time to evaluate the project you need help with. Is it long term or short term? Can one contractor handle the job, or do you need multiple? Does the project require someone with advanced education or special certifications? Generally, the best work for contractors is temporary and doesn’t require years of company-specific experience. Contractors often operate as a business, whether a formal entity or sole proprietorship, and usually have multiple customers. So, if you have a long-term project that requires a full-time work schedule, you should consider whether an alternative option would be more feasible than using contract labor. Cost, expertise, and convenience are all important factors. 2. Determine Contractor Qualifications After verifying your need for a contractor and identifying the work you want performed, determine the qualifications you need in a contractor. Be sure to separate preferences from deal breakers. For instance, if you’re looking for a bookkeeper to “clean up your books” because you haven’t had the time to do it, consider whether you want the person to be certified or have a degree. Typically, bookkeeping certification would be a preference, while experience would be a requirement. 3. Write a Job Description Figuring out what you need and want in a contractor will help you create a solid job description that saves you time by primarily attracting your target candidates. It’s disappointing to sift through a list of contractors who can’t perform the work you have or just don’t meet the qualifications. This is why it’s important to be direct when writing your job description and clearly note you’re specifically looking for independent contractors. Here are the most important items you should include in a job description: Job details: Provide detail on what the project entails. Required credentials: If you require a degree, license, or other credentials, include it so contractors who don’t qualify won’t apply. State if it’s a preference rather than a requirement, so you don’t miss out on eligible candidates. Length of job: Estimate the length of time you expect the project to take. If you’re looking to build a long-term relationship over a series of projects, express this in the job description. Ideal contractor: It’d be helpful to spell out what your ideal contractor is like. You can list traits like adaptability, charisma, and so on. Company profile: Include a brief description of your company with details on its industry and clients. Pay: Some companies list the pay amount (either by hour or project) directly on the job description. Although pricing is an important detail that governs the owner-contractor relationship, it’s not always a good idea to include it in the job description. Instead, request quotes from the contractors you’re interested in; this leaves room to negotiate. If you’re interested in posting your contract work on a job board, consider . It offers the largest network of independent contractors, and you can put parameters on your jobs so that only top qualified candidates can apply. Additionally, you can post jobs for free on the site but you are subject to a 2.75% client fee when you pay your contractor. 4. Search for Contractor Candidates Once you know what your needs are and have your job description, you can begin searching for contractors. Deciding where to search sets the stage for this step, and it primarily depends on the type of work you have available. For instance, you’d look for bookkeepers, virtual assistants, and roofing contractors using different platforms. There are numerous avenues you can use to search, but you should take advantage of the internet as it’s convenient and offers a wide reach. 5. Compile Applicant List & Screen for Best Candidates As you proceed through the process of hiring a contractor, start compiling a list of eligible candidates. You should be able to eliminate some contractors before doing any major evaluation. Always refer to your qualification list and job description to keep you on track because it’s easy to become sidetracked when reviewing dozens of candidates. Be aware that some contractors will look great on paper but aren’t exactly what you need. They may have more qualifications than the job requires and hence exceed your budget. On the opposite end, you’ll find some deals that look very attractive financially, but the contractor’s experience may be questionable. Once you compile your list, filter it for the candidates that fit your profile of an “ideal contractor” for the job. If you struggle to find ideal candidates, screen for the next best. 6. Request Quotes From Each Contractor Once you know which contractors you’re willing to work with, you can hone in on pricing. By the time you reach this step, you’ll most likely already have insight into the amount each professional charges. It’s up to you whether you want to negotiate; you should wait until officially meeting with them before starting the process. Be cautious of quotes that are too high or low. Any quotes significantly outside of the general range could signal a red flag. Compare all prices and consider factors such as experience and contractor business structure before drawing any conclusions. Eliminate any contractors that don’t fit. 7. Interview Top Independent Contractor Applicants After receiving a few bids for the job, you’ll interview the best contractors and negotiate a price before making your final decision. Similar to scheduling a job interview, you should set up a meeting or call with the top independent contractor applicants. Three is a good number to consider, but add more if you want additional options. Use the meeting to ask questions and assess the contractors’ capabilities and compare your findings with the research you’ve already gathered. Ask questions and review attributes during the interview stage so you’re ready to make a decision shortly after. Those are great questions to ask. However, there are some questions and comments you should avoid: Are you able to come to our office from nine-to-five each day? We have a weekly staff meeting every Wednesday at 9 a.m. We’ll expect you to attend. You don’t need to send us an invoice; we’ll just pay you a regular salary with normal payroll runs. You’ll be reporting to X employee and they’ll conduct your performance reviews quarterly. Have you overseen employees before? This role will require you to manage two employees. All of these questions and comments blur or outright eliminate the line between an independent contractor and an employee. You don’t want to do that as it could be costly for your company. 8. Extend Offer & Prepare Independent Contractor Agreement You’ll need to decide which contractor you’ll hire and prepare to extend an offer. An offer to an independent contractor doesn’t come in the form of an offer letter as it would for an employee. Instead, you’ll prepare an independent contractor agreement that clearly describes the relationship between the parties, the scope of work that’s expected, the rate you’ll pay (only after receiving an invoice from the contractor), and any milestones or deliverables and their timeline. While you should speak with the contractor first to line up all these details, putting it in writing is important to protect both you and the independent contractor. This agreement will have legal consequences if you violate the terms so make sure you’re comfortable with the final version. For the contract to be legally binding, both you and the contractor must sign. It’s best not to begin working with any contractors until a fully executed (signed) contract is in place. Federal Laws on Hiring a Contractor One of the best parts about hiring independent contractors is the lack of extensive regulation. Hiring employees subjects employers to numerous laws, but working with contractors is much less complex. Depending on your state, you may have to report new contractors to a state agency. Your primary concern should be ensuring that your contractor is indeed a contractor and not an employee. You shouldn’t dictate how or when the contractor works, only what the final product should be. Penalties for Misclassifying Independent Contractors Penalties for not complying with federal laws can be costly. The IRS is very sensitive to contractor-employee misclassifications and will search for those occurrences when conducting audits. If the IRS discovers you misclassified any employees as contractors, the contractors are automatically reclassified and you may owe back payroll taxes (15.3% for Social Security and Medicare (FICA) and possibly 20% for income taxes) and penalties of $1,000 per misclassified worker; you’ll also be subject to paying the misclassified worker back overtime pay, if applicable. We should note that you could also get a year in prison. Be sure that you’re not setting your contractors’ work hours or controlling how they perform their work; otherwise, they should probably be employees. State Contractor Classification It’s also a good idea to check whether your state has specific contractor classification tests that you can follow to ensure you comply. Several states use the ABC test to determine if someone is really an independent contractor. The ABC test has three phases: Is the contractor free from the direction and control of the hiring entity? Is the contractor doing work that is outside the scope of the hiring entity’s business? Is the contractor customarily engaged in an independently established occupation, business, or trade that is the same as the work being performed? If you can answer “yes” to all three of these questions, you will pass the ABC test. The second one is often the most precarious for companies engaging independent contractors. Say your business provides accounting services to clients. You have four full-time accountants who provide these services and now you want to add an independent contractor accountant to supplement additional work for clients. You can’t. That new worker would be an employee because they don’t pass the second question. The following states use the ABC test. If your state isn’t listed, that doesn’t mean you’re free to classify however you like. Your state probably has very similar classification steps it will follow to determine whether a worker is an employee or an independent contractor. Also keep in mind that if you’re partnering with a remote independent contractor, the state laws where they live and work will apply. California Connecticut Delaware Illinois Indiana Massachusetts Nebraska Nevada New Hampshire New Jersey Vermont Washington West Virginia New Hire Reporting for Independent Contractors Federal law doesn’t require new hire reporting for contractors, but some states do. These states match the reports against their child support records to locate parents, establish a child support order, or enforce an existing order. All laws differ, so it’s best to check your state’s website for specifics. Here are the states that require businesses to report independent contractors with a link to the new hire reporting portal or other relevant site: Arizona California Colorado Connecticut Delaware Florida Iowa Maine Massachusetts Michigan Minnesota Nebraska New Hampshire New Jersey Ohio South Carolina Tennessee Texas Utah Virginia West Virginia Federal Laws on Paying Independent Contractors Generally, you aren’t required to withhold taxes from an independent contractor’s pay. They are obligated to pay their own contractor taxes. However, if you’re unable to gather their Social Security Number (SSN) or Tax Identification Number (TIN), you’ll need to withhold 24% from each payment to remit for taxes. The IRS requires you to collect your contractors’ identifying information, like name, SSN or TIN, and address (usually on Form W-9), at the time of hire so you can file the 1099 tax form at year-end with ease. 1099 reports all contractor earnings for the year. You’ll send a copy to each contractor, the IRS, and your state tax agency. This ensures the tax agencies are aware of who should be paying their own taxes. Bottom Line Hiring independent contractors requires analyzing the work you need to be completed so you can determine the best professional for the job. You’ll spend time researching different options and strive to choose the best one based on cost, ability, and ease of use. Understanding federal and state laws is also important so you avoid penalties and taxes.
December 6, 2022
Recruitment Management System: Small Business Guide
A recruitment management system (RMS) is a human resources tool or set of tools used to manage the process of recruiting, interviewing, and hiring new employees. Managing your recruitment process sounds simple enough but it requires constant monitoring and adjustments and compliance with employment laws to ensure it is fair and non-discriminatory. The right RMS can automate your process, from finding and engaging candidates to interviewing and making offers, reducing the load on you or your team and resulting in higher-quality hires. provides small businesses with an end-to-end recruitment management system. It can post jobs on numerous job boards and set up and manage your entire recruitment and selection process online in one portal, creating a seamless and efficient experience for both you and your applicants. How an RMS Fits Into Your Recruitment & Selection Process The type of recruitment management system you should use depends on how much hiring you plan to do and how often you plan to do it. A free job board and applicant tracking spreadsheet may be more appropriate for small businesses that are only hiring a couple of employees per year, whereas complete recruitment software works better for companies that are scaling rapidly. Let’s take a look at how an RMS works in the different steps of your recruitment process. Posting Jobs Posting jobs is tedious. To reach the maximum number of potential candidates, you need to post your open job on at least several of the major job boards. Doing this one by one will take valuable time and probably result in not posting on every job board, which could reduce the number of candidates who see your open job. Unless you work in an industry that utilizes an industry-specific job board, you're more likely to attract the best candidates if you make your job posting visible in multiple places. A recruitment management system like will automatically post your open job to numerous job boards at once. Additionally, it will allow you to create a company page where you can direct potential candidates to learn more about your company and see all of your open positions. A good RMS will also allow you to send recruiting emails to candidates who match the qualifications found in your job description and compile all of your candidates so you don’t have to bounce between multiple sites. Employment Application Even if you do not have a company job application form, there is still certain information you need to collect during the application process. Through your RMS, you can collect relevant information about every job candidate, including: Full name Complete address Phone and email Previous employment history During this stage of the candidate’s application, you can also ask specific questions. Be careful with some questions as asking certain questions about a candidate’s background or criminal history can be illegal, depending on the state in which your company operates or where the candidate lives. Not only can an RMS help you build the application process, but it can also alert you if a question you want to ask could be illegal. Applicant Screening When recruiting manually, you would need to review each candidate’s resume individually. You’ll need to match it to the job description and ensure they tick off the boxes you need for the role. This is a time-consuming process. An RMS does this matching automatically. Your system will screen candidates for you, only notifying you of those that match your open job best. This reduces the time you have to spend screening candidates and ensures that the candidates you review are of higher quality. Interview Scheduling Once your RMS narrows down your candidate pool for you, you need to review the highest-quality candidates. As you look through their resumes and applications, you may want to schedule interviews with some of them. Some recruitment software is capable of scheduling interviews for you. When you want to interview a candidate, you can select several dates and times that work for you and the system will offer those slots to the candidate. When the candidate selects one of those options, your RMS automatically books that time on your calendar, eliminating the back-and-forth required to set up an interview manually. If you’re interviewing multiple candidates, this is a massive time saver. Bottom Line A strong recruitment and selection process is key to successful hiring for any small business, particularly in this competitive environment. Having the right recruitment management system such as , speeds up your hiring process and reduces the manual labor you have put in for each new open position. An RMS will also help your company remain legally compliant with confusing and complex employment laws.
December 6, 2022
Parallel Testing Your Payroll Software in 8 Steps
Parallel testing is the process of running the same payroll in two payroll systems to ensure that both have the same outputs. That means all the information regarding employee net pay, taxes (including year-to-date totals), and withheld benefit premiums reported in the new software aligns with what is reported in the old system. Parallel payroll testing—which involves documenting your current process, running payroll in a test environment, and evaluating the results, among other steps—ensures your new system is set up correctly, so your first payroll will be correct. Step 1: Document Your Current Payroll Process You should document your payroll process from when your previous payroll closes until your current payroll closes. One mistake that happens during testing is only examining the duties of your payroll processor(s). Everything that touches the payroll system needs to be tested, including how benefit elections are entered, along with compensation changes, tax withholdings, employee demographic information, paid time off, and anything else related to your payroll process. This is especially the case if your payroll system is also your HR system. Ideally, this is an ongoing step, something you update as your payroll processes change. If you don’t have all this documented before changing payroll providers, it may take days or weeks to put this together. Step 2: Gather the Necessary People Similar to the first step, everybody with a role to play in the payroll process (benefits, HR, and payroll) needs to be involved in the parallel payroll testing process. At most small businesses, it may be a small team, so be sure to include the backups as well. The individuals involved in the overall payroll process will have the best understanding of a normal payroll process, and they can bring up the items that give them the most trouble. This step should be done in coordination with your account representative at your new payroll provider. Have everyone sit at their own computer so they can walk through each step, clicking and checking items themselves. This will help them learn the process, spot any potential issues, and raise relevant questions. Step 3: Ask for a Payroll Test Environment Most payroll software providers should be able to provide you with the “sandbox,” which is an environment that mirrors the look and feel of payroll software but is used only for learning and testing purposes. It’s essentially a demo setup of your company account. You can practice running as many payrolls as you like without any impact on your actual company books. Step 4: Process Payroll as Normal This can be done in two ways: You can process your normal payroll and your test payroll simultaneously. You can process your test payroll after your normal payroll is finalized. Many companies do not have the time and resources to process simultaneously, so they test payroll the week after the normal payroll processing is completed. This includes entering personnel changes (e.g., new hires and terminations) and pay period items (e.g., hours worked and bonuses), as well as mirroring your payroll review process (e.g., checks paid outside of payroll and hourly employees’ timecards). We recommend, if you have the resources, to run both payroll processes simultaneously with your old payroll system as the live, or real, payroll. Running these together will ensure that each step is accurate and final payroll numbers are identical. Using your old payroll system as the live payroll also ensures that if there are any issues with your new system, you still have access to the old system if you need to run additional payrolls. Step 5: Gather Reports Both payroll software (current and future) should be able to provide you with payroll reports. These reports should indicate payroll totals, individual results for each employee, and sample pay stubs. Try to download reports that are in Excel format and a visually friendly format such as a PDF. Step 6: Review Results in Both Software We suggest beginning with your payroll total summary, which includes your gross payroll, net payroll, and total tax amounts. Testing your payroll outputs is crucial. Make sure employee time off is calculated and paid correctly—same for overtime. Make sure retirement fund contributions are correct and taxes are accurate. Also, review the general ledger, line by line, to ensure each output shows the exact same numbers. If those amounts look correct, you can be fairly certain that the testing was successful. We still recommend spot-checking several employees’ pay stubs to confirm your previous results. If the totals do not match, review the category totals to see which ones are not the same. Once you determine the categories, you can go into the employee details to see which specific cases are different. This information should be investigated and discussed with the new payroll provider if you can’t resolve it. Some discrepancies are due to the input information not matching, user error, or a different calculation process for the payroll service (we go into more detail on errors and discrepancies below). Once you and your provider figure out the root cause, you need to document it, decide how to account for it moving forward, and retest. Step 7: Redo Steps 4–6 for Another Payroll Cycle (If Not Two) Testing multiple payroll cycles ensures results are correct and accounts for any infrequent items (such as commission payments and monthly benefit deductions) before completely switching to the new software. Step 8: Ask for Help If your payroll software provider offers implementation services, reach out to your specialist and see if they can be on-call, or schedule a call on your normal payroll processing date just in case. We do not recommend skipping this step. Your new payroll system will have unique steps and a different user interface than you’re used to. Testing with the help of someone who’s experienced in the system allows you to quickly find items and reports, while also showing you the exact steps you should take for each process. Never be afraid to ask for help even after you’ve been using the system for a long time. Payroll is one of the most important functions of your business and it’s crucial that you get it right every time. Need step-by-step instructions on changing payroll providers? Check out our guide on how to switch payroll providers. Identifying Common Errors & Handling Discrepancies Here are some of the most common errors you will encounter moving to a new payroll system and tips on handling them: Bottom Line Redundancy is a key to business efficiency. Payroll software is no different. Parallel payroll testing is an integral part of ensuring that your payroll software change goes smoothly. Gather the right people for testing, load the appropriate information into the new payroll system, be careful to follow your normal payroll process, and have a detailed plan of comparing both payrolls using payroll reports. Through this, you will have minimal disruption when the change is finalized. Make no mistake, this is a time-consuming and labor-intensive process, but it’s also necessary to ensure absolute accuracy with your payroll. You want your employees to get paid correctly and you want your company to avoid IRS fines and penalties.
December 6, 2022
2023 Justworks Review: Is It the Right PEO for Your Business?
Justworks is a highly affordable, IRS- and Employer Services Assurance Corporation (ESAC)-certified professional employer organization (PEO). As a PEO, it processes your payroll, files and pays your taxes, and manages your benefits. Aside from granting you access to enterprise-level health benefits packages from major insurers, it has HR consultants available to answer your questions and help you stay compliant. With monthly plans that start at $59 per employee (for the first 49 employees), it’s one of the most reasonably priced PEO services on the market. Justworks is our top pick in our guide to the best PEO companies for small businesses. Because of its high marks for pricing, payroll, and HR tools, it earned a high score of 4.46 out of 5. It’s well-loved for its easy-to-use interface and reliable PEO services. However, it didn’t score higher because of its inability to customize reports, limited mobile app features for employers’ on-the-go access, and lack of learning management tools. It’s also worth noting that it offers its time tracking solution as a paid add-on. Justworks Overview What We Recommend Justworks For We’ve researched many PEO systems and compared each solution’s features and services, and we found that Justworks provides excellent value for the price. In addition to topping our list of best PEO companies, it is among our leading online payroll services. Small businesses with limited HR experience can benefit by having Justworks take on the duties and responsibilities of payroll and benefits management, while those with HR teams can let Justworks take on the administrative tasks while they handle the people side of HR. In short, Justworks PEO is best for: Businesses looking for a PEO with transparent and affordable pricing: Unlike most PEOs, which require you to call and request a quote, Justworks’ pricing is readily available on its website. While some providers charge either a percentage of your total monthly payroll or per-employee fees that can cost more than $100 monthly, Justworks charges $59 per employee monthly for your first 49 workers ($49 per employee monthly for your 50th employee onward). Small companies that want to offer high-quality benefit options: Justworks has solid tools for managing your payroll and employee benefits needs. Because it handles benefits for its clients’ 70,000+ employees, Justworks has the purchasing power to negotiate rates and benefits coverages from leading carriers and insurance providers. Thus, it can offer you high-quality health insurance and medical plans from UnitedHealthcare, Kaiser, and Aetna. Employers who pay 1099 contractors in addition to W2 employees: Unlike other payroll software and PEO providers that charge monthly fees for contractor payments, Justworks lets you pay contractors at no extra cost. Plus, it handles 1099 filings at year’s end. Small or rapidly growing businesses with limited HR personnel and experience: Justworks will take on your HR tasks and responsibilities and provide in-app educational resources, such as sexual harassment prevention training, and access to experts who can offer HR, benefits, and payroll support. While pricing can seem expensive for some, the support and the convenience could be worth it, especially if you have few or no staff members with HR experience. When Justworks Would Not Be a Good Fit Companies in high-risk industries or those with specific needs: Justworks’ reporting and integrations are limited. Industries that need particular reports for compliance may not find what they need. For instance, trucking companies may be better suited to using trucking payroll solutions. Also, businesses in high-risk industries like construction may run into issues getting full liability coverage. Large businesses: While Justworks can work with companies with more than 175 employees, its focus is on small businesses. If your business is bigger, Paychex or ADP may be a better fit as they are both built to support large enterprises and have HR payroll software options plus a PEO. Expanding businesses needing hiring tools: Justworks does not have recruiting and applicant tracking tools. If you need these solutions, check out some of our HR software picks. Businesses needing straight payroll: If Justworks' PEO service is more than you need, explore our article on how to find a payroll service for your business or read our best payroll services guide to find simpler, cheaper options. Justworks Top Alternatives at-a-Glance One refreshing thing about Justworks’ pricing is that it’s fully transparent—you can easily find it on its website. Most PEOs require you to call for a quote. It also doesn’t impose setup fees, instead charging you per employee, unlike other PEOs that charge as a percentage of your payroll. As a result, Justworks got perfect marks for pricing. It offers two plans (Basic and Plus), with pricing based on the number of employees you have. Its monthly fees also decrease as you reach a 50-employee headcount. *Monthly fees for Justworks’ time tracking solution start at $5 per employee plus a $20 base fee. Note that Justworks has a two-individual minimum to run payroll. One can be an unpaid owner and the other must either be an hourly/salaried W-2 employee or a part-time W-2 staff member who works 20 or more hours and receives no less than minimum wage. For companies with high hiring and turnover rates, Justworks' plans are flexible enough to handle changes in your employee headcount. The provider will only charge you for the actual number of W-2 employees paid through its system. You can also upgrade or downgrade your subscription by informing Justworks (via Slack, chat, email, or phone) that you want to change your plan a month or more before the date when you’d like to make the switch. Furthermore, Justworks offers flat-rate pricing if you have part-time employees (note that this doesn’t apply to full-time employees). You pay only for months that you have active part-timers. Its system is also flexible enough to determine how many part-time and full-time workers you have, enabling it to automatically bill you the applicable rates for both employee types. Justworks makes managing payroll and benefits easier, enabling you to focus more on growing your business. It got a perfect score for this criterion because it helps prepare year-end tax reports. Its online delivery, flexible payment schedules, and direct deposit option, as well as local and payroll tax handling (which includes calculating and filing them) also contributed to the score. Justworks got a perfect mark for HR administration tools. It offers all the features you need to manage HR including onboarding and new hire enrollment, employee self-service portal, compliance issues tracking, and benefits administration. It also provides harassment prevention and inclusion training. This criterion clearly lowered Jusworks’ overall score. While it offers training for new employees, it doesn't have a learning management system, plus its time tracking tool costs extra. Justworks also doesn’t offer a recruiting and applicant tracking system. Justworks got a modest score of 3 out of 5 for this criterion. While it is IRS- and ESAC-certified, it only handles basic payroll and HR reports. Justworks lets users have access to its pre-built reports; however, you can’t create customized reports for your business’ needs. The only thing that prevented Justworks from getting a perfect score for this criterion is its lack of features in the mobile app for employers. The good thing is that getting started with Justworks is easy. You’ll have an onboarding manager to help you through the process of activating your account, setting up your benefits, and getting your employees on the platform. As part of its PEO services, Justworks helps manage your employee benefits and automatically handles your workers’ compensation, payroll tax filings, and employer practices liability insurance (EPLI). Here are the top things that make Justworks easy to use: Intuitive, easy-to-use interface Dedicated onboarding manager Access to HR consultants Compliance starter guides by state In-app help and explainer videos Help center with how-to articles Benefits management and compliance assistance 24/7 support via email, chat, phone, short message service (SMS), and Slack Justworks prides itself on creating software that is educational and useful. So, it’s loaded with links to helpful articles about points of law and compliance, including explanations of terms you or your employees might not be familiar with. It also has an online resource center that offers how-to articles and helpful guides about benefits and state regulations, among others. You are even granted access to certified HR professionals who can provide expert advice and best practices on how to manage your workforce. If you need assistance, Justworks has customer support representatives available 24/7, so you can contact someone in the United States anytime you need help. We consider Justworks as an excellent PEO company due to its reliability. In our expert review, it received a high score because of its strong HR compliance features, quick implementation, and fuss-free opt-out policy. Plus, its software is easy to learn and explore even for non-technical users. What Users Think About Justworks Users who left positive Justworks reviews online are satisfied with its system and services. They praised the ease of use of the interface and said that the benefits packages were top rate, especially for small businesses. Several reviewers also commended its support team for providing good service. Most complaints were about needing more—more types of reports, more integrations, more details, and more tools for specific functions. At the time of publication, Justworks earned the following scores on popular reviews sites: Capterra: 4.7 out of 5 based on 190-plus reviews G2: 4.6 out of 5 based on more than 200 reviews Bottom Line is an affordable and highly rated PEO for small businesses. Aside from its online solutions that make it easy to onboard employees, it provides HR, benefits, payroll, and compliance support to ensure that you abide by federal and state regulations. Unlike many PEO providers, Justworks has fully transparent pricing with plans that cater to businesses with fewer than 25 employees and those with more than 175 workers. Sign up for a Justworks plan today and see how its PEO services and cloud-based tools can help streamline your HR and payroll processes.
December 6, 2022
2023 OpenCATS Review: Features, Pricing & Alternatives
is a free, open-source applicant tracking system that can help users create custom job postings, manage applicant data, create candidate pipelines, make custom email responses, schedule recruitment-related events, and generate reports. The platform also supports external and internal job posting and is customizable depending on a recruiter’s workflow requirements. Although it didn’t make our list of recommended software, OpenCATS earned a score of 3 out of 5 in our best free applicant tracking system evaluation because it's free forever and has strong reporting features. OpenCATS received zero on the popularity criterion because of its lack of reviews on third-party sites. Also, users don’t get customer service, so if you have an issue with the software, you will need to do some research or join an online community to find answers. OpenCATS Overview What We Recommend OpenCATS For OpenCATS is a highly customizable applicant tracking system, which works on most environments including Linux, Ubuntu, Windows, and Mac OS X. Users can install the program on a computer and access it locally. Also, installation over a shared server or hosting account is possible. This way, it’s accessible by different users via the internet. In short, OpenCATS is best for: IT companies looking for a customizable applicant tracking system: OpenCATS has a suite of recruiting tools, which can be tweaked according to an organization’s preferences. The installation process and customization require computer programming skills, and companies with a strong IT employee workforce should greatly benefit from this open-source software. Small to midsize businesses with limited recruitment budgets: Other companies can of course use OpenCATS too. Interested businesses may hire an IT professional to set up and customize OpenCATS for them. This is a low-cost solution since a business only pays for the related set-up costs. Once up and running, recruiters can use all features for free. If a business opts to install it on a hosted account, there will be an additional cost for web hosting. When OpenCATS Would Not Be a Good Fit Businesses needing technical support: While OpenCATS is an affordable program to run, it’s not for businesses that expect to have round-the-clock chat, e-mail, or phone support for technical problems. OpenCATS only has a support forum and development community for users who need assistance. You may want to consider Rippling, which has live in-app chat, email, and paid phone support. Companies that usually hire many employees at a time: Although OpenCATS does a great job of storing applicant resumes, it doesn’t have a resume indexing or parsing feature to help save time going over resumes. For a resume screening tool as part of reasonably priced plans, check out Freshteam. OpenCATS Top Alternatives OpenCATS is available at no cost. What’s good about open-source programs like this one is that it gives users control over integrations and data. Users with technical computer skills or those willing to learn can use the program’s documentation provided on its website. Otherwise, those interested in using OpenCATS may hire an IT professional for installation. The only thing that prevented OpenCATS from getting a perfect mark for this criterion is its lack of plan options. OpenCATS obtained a high score in this criterion because it has a suite of applicant tracking features you can use for the recruiting process, from creating a job posting to hiring candidates. What prevented OpenCATS from getting a perfect score is the inability to add screening questions to a job listing. OpenCATS obtained a perfect score for reporting because it supports Equal Employment Opportunity (EEO) reporting by concealing voluntary information provided by the applicants. Also, users can easily generate EEO reports, which are customizable by time frame—all time, last month, or last week. Well-organized layout User support forum Detailed documentation OpenCATS got a low score for ease of use because it needs high technical skills before installation and when integrating with other software. It also lacks tutorials and phone support. Once it is installed and customized, OpenCATS is easy to use. Users can easily navigate through its features because of its clean interface. Although it lacks prompt technical support services, it has a support forum where users can find solutions or post their questions. Overall, OpenCATS is an intuitive applicant tracking system but technical skills are a must to get it up and running and resolve issues. At the time of publication, OpenCATS doesn’t have updated reviews on popular sites. A few other reviewers, however, have shared their evaluation of the program. PAT Research, for example, gave OpenCATS an editor rating of 9.5/10 and 7.8/10 aggregated user score from four ratings. Bottom Line If you have the IT skills or workforce and you’re after a fully customizable yet affordable applicant tracking system, is a good option. After successful installation, it’s simple enough to use even with its multiple features such as career page creation, resume storage, applicant pipeline, communication and scheduling tools, and report generation. While it doesn’t have chat, email, or phone support for technical problems, it has a user support forum for issues. You can check out an OpenCATS demo anytime to learn more about its features and check if it’s right for you.
December 6, 2022
8 Best PEO Companies for Small Businesses in 2023
December 5, 2022
MinistryWorks Review: Is It Right for Your Business in 2023?
MinistryWorks is a payroll and tax solution for churches and ministries. It has in-house experts with clergy tax law experience and can handle church-specific needs like paying housing allowances. It also assigns a dedicated payroll specialist to assist you. MinistryWorks is best for religious organizations searching for an affordable and reliable payroll solution with solid experience working with churches. What We Recommend MinistryWorks For MinistryWorks, one of our top-recommended church payroll software, has a full suite of payroll processing and tax compliance tools that support numerous churches and related ministries. A MinistryWorks payroll professional will personally get to know your payroll needs and assist you when processing your first pay run. MinistryWorks also has tax experts who specialize in clergy and ministry tax law; they will represent you when dealing with the IRS and other government entities—and if they make any errors in calculations or filings, MinistryWorks will shoulder the fines. In short, MinistryWorks is best for: Churches with limited in-house payroll expertise: With MinistryWorks, small churches with limited resources can enjoy automated payroll and tax filing services for an affordable price. They also get access to a dedicated personal payroll specialist who’ll answer all their payroll questions. Midsize ministries with both clergy and non-clergy employees: MinistryWorks offers a payroll service that can handle more than 50 non-clergy and clergy employees. If your church employees perform more than one job and have different rates for each task, MinistryWorks supports multiple earnings as well as deduction types. When MinistryWorks Would Not Be a Good Fit Churches that want to set up multiple outside software integrations: MinistryWorks integrates mostly with its other solutions such as its in-house time tracking tool that works well with its payroll software. If integration options are important for your church, we recommend Gusto as it integrates with several third-party systems (such as accounting, expense management, and learning management). Growing ministries that need both payroll and HR solutions: MinistryWorks doesn’t have advanced HR features that can help growing churches with recruitment, benefits, and employee management. If you need those functions, check out our list of the best HR payroll solutions for more suitable options. Top MinistryWorks Alternatives If you need help evaluating which software is right for you, check out our guide on choosing the best payroll software. MinistryWorks Pricing MinistryWorks doesn’t publish pricing information on its website. What it offers is an online calculator that shows estimated fees on a per pay run and annual basis. MinistryWorks’ fees decrease as the number of employees increase. *Pricing includes W-2 preparation work and direct deposit payment services. Keep in mind that the figures above are cost estimates and may not include charges for other solutions or services, like paper check stocks. To get accurate pricing, contact MinistryWorks and request a quote. MinistryWorks Features MinistryWorks’ extensive line of tools allows you to process payroll and file employee taxes accurately. At the same time, you can automate your organization’s basic HR processes like new hire reporting and employee time tracking. Let’s look at some of its features to help you determine if it’s right for you. MinistryWorks Ease of Use Software is easy to use Intuitive dashboard Self-service portal In-house specialized clergy and tax laws knowledge Dedicated payroll specialists Hands-on with the implementation process MinistryWorks is very easy to set up and use. As soon as an agreement is reached, the company assigns an implementation specialist to assist you in getting its system up and running as well as walk you through your first pay run using its software. MinistryWorks will even help create a payroll processing calendar based on your pay schedule. A dedicated payroll expert will work with you anytime you’re having issues with the system and have questions about pay processing. What Users Think About MinistryWorks There are very limited MinistryWorks reviews online as of this writing. Most of the user feedback is posted on its website, and many like its affordability, ease of use, and efficient payroll and tax filing tools. We didn’t find any negative feedback apart from one user who posted a review on the provider’s Facebook page about having received poor customer support. Bottom Line MinistryWorks is a payroll service exclusively for churches and related ministries. On top of processing payroll and tax filing, it provides its users with tax advice and guidance that is specific to churches. Its reps establish a personable, helpful relationship with companies vs leaving them to fend for themselves. Schedule a free demo today.
December 2, 2022
Earnings Withholding Orders: What Employers Need to Know
An earnings withholding order is a court-issued wage garnishment requiring employers to withhold and remit money from an employee’s paycheck to pay a creditor for an unpaid debt. Some examples of such debt are past-due student loans, delinquent tax bills, and even unpaid child support. To avoid liability, employers should immediately and only withhold what’s required in the order and ensure the funds are sent to the appropriate agency. If you need help processing a garnishment for an employee, consider using a payroll software like . Once you sign up for a Paychex payroll plan, you can add the garnishment service as an add-on when needed and remove it when you don’t. A specialist will request that you send the earnings withholding order, and they will process everything on their end. Visit the website to set up a free consultation today. How Earnings Withholding Orders Work When creditors deem accounts uncollectible, they have the right to sue the person at fault to collect the funds owed. Once the creditors have submitted enough documentation to the court confirming the debt is real, a judge will issue a wage garnishment order to the person’s employer with details on how much money to withhold, how long to withhold it, where to send the funds, and if the employer can deduct any administrative fees. Federal laws, along with state regulations, regulate the wage garnishment process. Generally, you’re not allowed to deduct more than 25% of an employee’s income for non-child or spousal-related garnishment orders. Child support orders typically max out at 50% to 65% of an employee’s income and are issued via income withholding orders; these are issued by state agencies to help parents or spouses collect on financial support. The garnishment notice usually comes with a set of instructions so that you know how to use the information and calculate the amount to withhold. Common Information You’ll Find on Earnings Withholding Orders All garnishment orders look different depending upon the state in which they originated—but these should always contain enough information to help you validate who the debtor and creditor are. It should also be clear that you are the designated recipient of the document. You should expect to find the following on an earnings withholding order: Plaintiff information: The plaintiff is the creditor who is garnishing the employee’s check for a delinquent debt. The garnishment order will list a name, regardless of whether it’s an individual, company, or government agency (for past-due taxes). The order may also provide contact information, including an address. Unless the earnings withholding order specifies that you’re supposed to send payment directly to the plaintiff, don’t assume that’s what you should do. You and your company could be liable if payments are made incorrectly and not in compliance with the order. Defendant and debtor information: The defendant is the debtor or person who failed to pay the debt. The debtor’s name, address, and Social Security number should be listed to help you verify that they are your employee. You must verify this information to ensure you’re withholding money from the right person. State and court information: This is the state and county in which the garnishment order is issued. Most orders, except for those pertaining to government agencies―student loans and taxes―are implemented through the court. Debt amount: The debt amount is the total money that the creditor intends to collect. Usually, once a creditor decides to sue, they will sue for the full amount owed. Withholding details: There will be information to help you calculate the amount you should withhold such as 25% of the employee’s earnings. The order will also list here if you’re allowed to withhold administrative fees and in what amount. In most states, earnings withholding orders contain at least a brief set of instructions so that you know how to process them. If you have questions, always check with the issuing agency for help. Assuming or trying to figure it out on your own will inevitably cause problems. Processing an Earnings Withholding Order 1. Receive the order To process an earnings withholding order, you must first receive it. Usually, it comes as certified mail, but in some states like California, the sheriff or marshal physically delivers the garnishment order to the employer’s address. Other municipalities may send these orders by regular mail—do not ignore them. 2. Send a response The court or entity that issued the order typically requires a written answer within a specified period, which can be as short as five days, so it’s essential to act quickly. You’ll need to verify that the debtor is currently on your payroll before agreeing to comply with the terms of the withholding order. Also, you’ll most likely need to share how much money the employee earns, whether the worker has other garnishments, and whether your company can comply with the order on the commencement date. 3. Calculate withholdings If the garnishment notice doesn’t state a flat amount to withhold, as is frequently the case, you’ll need to calculate per the guidelines provided. Typically, this means you’ll need to apply a certain percentage to a portion of the employee’s income. If you’re doing this calculation yourself, it’s crucial that you triple-check your work. Are you calculating off the employee’s gross or net pay? Are you ensuring your employee has the minimum percentage required under state law as take-home pay? 4. (Optional) Speak with the employee It’s also advisable to speak with the employee. Do this in a private setting and with compassion, as some people may be embarrassed. While you can’t refuse to comply with the order even if the employee asks you to, it’s good practice to let the employee know you’ve received the order and that they’ll be getting less money in their take-home pay. This debt probably isn’t a surprise to the employee but they may be shocked if they see more money out of their next paycheck. Prepare them in advance by having a quick discussion with them. In my experience, once you bring up the debt with an employee, while not always happy about the extra deductions from their pay, they understand. 5. Withhold garnishments & send it to the creditor until paid in full It’s vital to start withholding the employee’s funds on their next paycheck or on the date requested in the order, following the receipt of the garnishment order to remain in compliance. You’ll send the payments according to the instructions in the document. Be mindful of sending it to the correct creditor and address in addition to paying the exact amount as often as required. Double-check the writ of garnishment―another term for garnishment order―to ensure you’re using the right information. Types of Garnishments From Earnings Withholding Orders Creditors issue garnishment orders for numerous reasons. The longer the employee has neglected to pay the debt, the more likely they will be subject to a paycheck garnishment, especially for debts issued by a government agency such as student loans. Some debts, like for back child and spousal support, can be garnished from a paycheck—but these may be subject to different rules and are processed under a different type of order, known as an income withholding order. Here are the most common types of debts that may be requested via a garnishment order: Income Withholding Orders vs Earnings Withholding Orders Sometimes, people use the terms “income withholding order” and “earnings withholding order” interchangeably, but there are differences. An earnings withholding order, which is the same as a wage garnishment order, is used to collect many types of debt, with the exception of debt for financial support. Meanwhile, income withholding orders are issued by state agencies to help parents or spouses collect on financial support that is owed to them and can be issued even when an employee isn’t behind. Pay close attention to any documents you receive that require you to garnish an employee’s wages. You’re allowed to withhold more than two times as much money for income withholding orders than you are for earnings withholding orders. This is because the court prioritizes the livelihood of children and other dependents over the finances of a traditional creditor. Maximum Garnishment Amounts for Earnings Withholding Orders There are federal and state laws that govern how much money you can legally withhold to comply with a garnishment order. As an employer, it’s important that you understand how much can be deducted before doing your payroll. It depends on how much money you’re paying the employee in total and if the debt is for financial support or an alternate category. If their disposable income is too low, you won’t be able to garnish any of their paycheck per a garnishment notice. Here’s a breakdown of the garnishment amounts you can process for each disposable income level: Maximum Garnishment Amounts of Employee’s Disposable Income* Source: United States Department of Labor *These limitations do not apply to certain bankruptcy court orders or to garnishments to recover debts due for state or federal taxes. Different limitations apply to garnishments pursuant to court orders for child support or alimony. These limitations help to ensure that employees still have money left over to support themselves. Workers earning below-poverty wages especially benefit from these limits. If someone is earning less than $218 a week, they’re most likely struggling already, and being forced to pay an old debt could be detrimental to their livelihood. Examples of Paycheck Amounts Subject to Garnishment Calculating garnishment amounts for employees who earn well above minimum wage is much easier than calculating for those who don’t. You can usually apply a percentage to their paycheck to determine how much money to withhold. For low-income employees, however, calculations require a little more thought. Here are a couple of examples to help you determine the amounts subject to garnishment, based on the current $7.25 per hour federal minimum wage: Other Garnishment Withholding Limits There are alternative limits placed on other types of garnishments, like child support, student loans, and taxes. You can deduct much more than 25% of an employee’s income if they need to pay for child or spousal support. Here are some additional garnishment withholding limits: Creditors can garnish an employee’s wages for up to 50% of their disposable earnings if the employee is currently supporting a spouse or dependent. If the worker isn’t supporting anyone, you may be required to withhold up to 60% of their earnings. If the employee is behind more than 12 months in payments, you can withhold 65%. If your employee’s student loans are in default, you may withhold up to 10% of their disposable earnings. Other federal agencies or collection companies under contract with the agencies can require you to withhold up to 15% of an employee’s disposable income for nontax debts. It’s important to be careful when calculating employee garnishment amounts. Different types of paycheck garnishments warrant different withholding amounts. Any other obligations an employee has could also affect how much money you can withhold. For instance, child support payments have to be deducted from disposable income when calculating garnishment amounts for nonfinancial support-related payments. Laws for Employers Processing Garnishments (by State) Besides the limits placed on withholding amounts, the law also protects employees from being discriminated against or mistreated due to the judgments brought against them. If you ever terminate an employee whose paycheck is being garnished, be sure to document the reasons why, as you legally cannot terminate an employee for having a single garnishment order against them. If you receive multiple earnings withholding orders for a single employee, you may be able to fire them legally, depending on the state’s laws. Federal law doesn’t protect employees who receive more than one earnings withholding order from being terminated. However, some state laws do, such as Florida. In Florida, you aren’t legally allowed to terminate employees’ employment for any garnishment-related reasons. Failure to comply can result in thousands of dollars in fines, penalties, and back pay. In extreme cases, you can be sentenced to serve jail time. Here’s a breakdown of each state’s garnishment laws: Penalties for Not Complying With Earnings Withholding Orders If you fail to respond to a notice of garnishment within the required time, the court may hold you liable for your employee’s debt. This can also happen if you fail to submit payments promptly or pay the wrong amount. Receiving a garnishment notice or income withholding order can be frustrating. It undoubtedly creates more work for you and possibly some of your employees, decreasing productivity and placing your funds at risk. Frequently Asked Questions (FAQs) Bottom Line An earnings withholding order is a legal document that employers receive regarding their employees’ outstanding debt. Whether it’s issued by a court or a government agency, employers are required to withhold funds and remit them to the appropriate creditor. Federal and state laws limit the amount that can be withheld; noncompliance can result in liabilities for employers. If you need help processing a garnishment order, consider using a payroll service like . It has HR and payroll experts on staff who can help you avoid being held liable for an employee’s unpaid debt. You’ll send your representative the garnishment order, and it will be processed accordingly. Call for a free quote today.