Staffing Software & Compliance Issues

Regulatory Compliance Flat Isometric Vector Conceptual Illustrat

In this article I would like to point out the many ways in which your staffing software helps to keep your company compliant with local, state, and federal laws.

This is particularly important for staffing companies because they often will be supplying employees to several companies in different industrial categories and locations. This may require different OSHA training as well as different state or local withholding tax jurisdictions. But in many other areas your staffing software provides critical support in keeping you compliant. I just want to mention a few.

Since much of this help is provided by a highly organized accumulation of critical data, a cloud-based system is usually used by all major staffing software providers (ours included)to ensure the secure storage and retrieval of a company’s data at any time.

Although we will be using only one comprehensive staffing software product as our knowledgebase, TempsPlus by Bridgeware Systems, Inc., we assume, based on the competitive nature of the business, that other “Front and Back office” or “Total Solution” software products may be similar.

E-Verify is an integration of your staffing software with the US Department of Homeland Security. It enables a user to submit applicant information directly from your software into the huge databases of the Federal government (Social Security, IRS etc.) It then returns a verification to your computer screen at the applicant’s master file within the software giving the applicant’s eligibility to work in the United States.

This is done with one click and the results are returned within minutes.

Affordable Care Act: This government insurance program has eligibility and costs based upon the geographic area,length of employment and average income. Since the staffing software has all the applicant data needed to calculate their basic eligibility and the plan chosen, the cost is easily generated and converted to a payroll deduction based on the payroll frequency.

All information is stored securely (cloud-based) and generates the reporting needed with the total amount due for each employee and reporting period.

The ACA formulas can be quite daunting but with all the government program data within the software itself, matching up with each employee is simple, fast and reliable.

All the final, personalized data needed for the new employee is generated online with appropriate forms that they have signed off on electronically. The software then  generates the printed version, personalized for each employee.

Multi-Jurisdiction Payroll module: This is the area of your staffing software where the correct (current/updated multi-jurisdictional tax tables are available for all areas of the USA and Canada. These are fully integrated within the software, so your deductions are always up to date and the reports sent to the taxing agencies are correct. This includes overtime rates that are either mandated or agreed upon.

The payroll software module also keeps track of other deductions and their associated reports like 401K’s for both the employee and any employer “matching”, health insurance premiums, court ordered payments, voluntary savings, etc.

Reports can be generated for any or all items or for any time frame, and, of course, the check “stub”or other reporting method required for employees paid via “direct deposit” and “debit card

These reports are stored in your employee’s payroll file which you can also make available to them directly via an employee portal on your website. The portal reliably gives your employee only the information you have specifically designated.

You can also re-print a W2 for any employee instantly whenever requested.

All of this accumulated data is safely stored and retrievable from the cloud-based software at any time in several reporting formats. Custom reports can also be developed.

Onboarding and Benefits Management: After any hiring decision is made, bringing the employee fully “onboard” requires the completion and signature (electronic**)of several documents, acknowledgement of company and client policies, selecting and setting up a benefits program and even viewing training videos, acknowledgement, and follow-up testing. Most of these are either required by law and/or to provide legal protection for your staffing company and your clients.

(** Electronic signature is accomplished via a private pin # that the employee generates as he or she begins the process. That pin # is known only to the new hire. Throughout the onboarding process that exclusive pin # is used to “sign” documents, acknowledge having read or viewed other materials like an employee handbook, training videos, or any other documentation that the user requires. etc.)

Applicants or new hires can provide this information online using their own computer, tablet, or mobile device. All information is instantly sent to the new employee’s master file in your staffing software.

The new hire can do this at their leisure, stopping and picking up where they left off as their schedule allows.

An added benefit to the employer is that as the employee enters their data, the software picks up information which indicates their potential eligibility for a “Work Opportunity Tax Credit” (WOTC). When that happens, the software adds a specific eligibility form that the new hire completes and signs(electronically) as part of their onboarding process.

Two excellent firms, Efficient Hire and Essential Staff Care, have been outstanding leaders in this Onboarding and Benefits Management process for many years. Bridgeware partnered with them to create a seamless integration of their well-designed utilities which perfectly complement our existing TempsPlus software.

The Family and Medical Leave Act (FMLA) This federal law requires employers with more than fifty employees to provide covered employees with up to twelve weeks of unpaid leave time during a

12-month period.

The covered employee must have worked for the company for a total of one year in the past seven years and has worked 1250 hours during the 12 months prior to the actual leave. Note that the hours requirement necessarily includes part time workers being eligible for unpaid leave time.

The medical reasons for the leave can be in any of 4 general categories:

  1. Pending or post childbirth or adoption. (note that “bonding” is a qualified need)
  2. To care for parent, spouse, or child with a serious medical need.
  3. The Employee has a serious medical need.
  4. Any serious medical or family need related to a family member serving in the US military

The help provided by your staffing software in these situations is basically in providing the hours worked during the appropriate time periods to determine eligibility. It also keeps track of the total leave time used,the leave time remaining, and makes note when the total of 12 weeks has been consumed during the year of eligibility.

Families First Corona virus Relief Act (FFCRA). This federal law in response to Covid-19 provided for paid leave time that was necessitated by the pandemic and had a more complicated set of eligibility rules, payment formulas, and immediate employer reimbursement.

Because of these complications a whole new software modification tool was written and integrated with our software to enable:

1.) the basic determining of employee eligibility.

2.) determining the category of their eligibility.

3.) the payments required by the employer.

4.)  implementing the immediate, dollar for dollar” tax offset against other payroll taxes due including what the employer paid for employee health insurance.

A further complication was if the total cost to the employer of funding the leave time, plus the health care costs, exceeded the total payroll taxes due, the company could file a request for an accelerated credit or refund.

We believe this is crisis development is a significant aid to our clients to the implementation of this excellent federal program. It was accomplished in record time.It has helped to keep them fully compliant while keeping them financially“whole” via the efficiency in managing reimbursement provisions.

Executive Order to allow the “Deferral” of Employee Social Security Tax Payments.

Everyone knows by now the difficulty the Congress and the President have had in getting a second round of stimulus to individuals and businesses. When the negotiations first broke down this past summer (August 2020), the President issued a series of “Executive Orders” to try and get some relief to citizens who might need it the most.

To those unemployed there was another Executive Order for a new “round” of federal unemployment supplements.For those still employed there was another Executive Order to allow the employee portion of the Social Security tax to be deferred. This latter was to increase the employees take home pay by 6.2% (The SS employee portion is 6.2% of income)

Because this was simply a deferral of the tax due (from Sept to Dec 31, 2020), the full amount of the tax deferred needed to be repaid by the employee by April 30, 2021.

Here again, staffing software changes needed to be made to enable our payroll system to defer employee portion of the SS tax for 4 months, keep track of the accumulating deferred tax balances (debt), then schedule the repayments due by April 30, 2021.

Although we made the necessary changes to accommodate this Executive Order, our company president and chief programmer had some serious questions about this whole Executive Order. He published these concerns in a blog article which he posted on the company website, our SM accounts, and company Newsletter.

Conclusion. These seven areas are just a few of the specific ways in which a comprehensive staffing software solution continuously helps your company to maintain compliance with every new and older compliance issue. And, at no additional cost!

Whenever software can help make your company more efficient and profitable, we are proud to provide it. We will continue to make these vital services available by way of our long-standing commitment to ongoing staffing software development and support.