2010 has seen changes in the business landscape for all of us, from the small start up to the large corporations, including H.R 2847, the Hiring Incentives to Restore Employment Act (HIRE Act) aimed at encouraging businesses to hire and retain unemployed workers. .

The nitty gritty of the HIRE Act focuses at putting America to work by providing businesses with a tax credit for qualified employees retained for at least one year, of up to $1,000 per worker. As well as a payroll tax exemption of the employers’ share (6.2%) of Social Security payroll taxes on the wages of a qualified workers paid between March 19, 2010 and December 31, 2010. In total these tax savings can add up to $7,621.60 ($1000 credit plus up to $6,621.60 in forgiven Social Security withholding for 2010) per employee. Better yet, you don’t have to wait till the next tax filing to see the benefits since the Social Security withholding’s never even leaves your pocket.

To make sure your new employee will save you money check the following:

* Were they hired after Feb. 3, 2010 but before Jan. 1, 2011?
* Were they hired for a newly created position, or a position that opened up from an employee willingly resigning or being terminated for a cause?
* Sorry guys, they can’t be related to you(the employer)
* Your new employee must sign an affidavit (form W-11) stating they have not been employed, or working 40 hours a week, in the prior 60 days to beginning work.

One great, and not as well known, gem in the HIRE Act -a qualified worker meeting the above criteria CAN be a formerly laid off employee of the company! And with no full time work requirements companies, small to medium sized business especially, can rehire at part time those great former employees, already knowledgeable in the field, as well as re-staff positions currently left vacant due to economic down turns, all while saving money!

And since we all love saving money through tax credits and forgiveness’ now is the time to take advantage of these incentives and work with us to maximize effectiveness. As we’ve seen with other tax credit, such as the New Homebuyer Incentives of 2009/2010, requirements and payouts are constantly changing and funds are available only for a limited time. Contact your tax professional for advice(it’s after tax season, and they will love to hear from you!), feel free to contact us for more information or refer to the IRS website for specific details

So how does this Act effect you, as a PEO client? Thanks to the efforts of the National Association of Professional Employer Organization(NAPEO) you can continue the smart decision to focus on what your company does best, and let us what we do best, while still reaping the potentially enormous benefits of the HIRE Act. But plain and simple, whether you hire directly or through a PEO service you can reap the full benefits of the HIRE Act.

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A professional employer organization (PEO) and administrative service organization (ASO) are organizations that provide services for your human resources, payroll and employee needs. Providers vary in size and stature, but should all specifically focus on your company’s and employees’ needs. They are a team of qualified human resource personnel, who take on many tasks specifically designed to increase in-house efficiency. A PEO/ASO even can take care of workers’ compensation and other important time consuming tasks. By outsourcing these responsibilities to an external organization, your company could save a large sum of money.

1. Simplify The Hiring Process

A PEO/ASO will save your company money by speeding up your application process. Most small companies do not have a dedicated human resource staff to evaluate new employees. This causes current staff members to evaluate new employees, a situation that is less than ideal. The current staff member will be less adept at judging new applicants than qualified human resource personnel. Also using current staff members to evaluate new employees will divert them from their daily tasks. A PEO/ASO doesn’t actually tell you which employees to hire, but will save time by refusing any applicants that don’t meet your minimum requirements. A PEO/ASO will take on the front end of your hiring process and help bring qualified personnel to your door.

2. The Best Deals In Workers’ Compensation

Another great way a PEO/ASO will save money is through workers’ compensation insurance. If you are running a relatively low risk business, you may not need to worry much in this area. However, if you are running a high risk business, like construction, then a PEO/ASO may be a huge benefit to your organization. PEO/ASO’s can save costs on workers’ compensation insurance. They can provide this because of two reasons; they are providing insurance at high volumes and may get better rates, and they often have a working relationship with carriers, medical providers, and claims departments.

3. Employee Benefit Administration

PEO/ASO’s are organizations that will manage the complex world of employee benefit administration from the simple functions of collecting the necessary premiums to remit monthly payments to the carrier, to monthly invoice auditing and billing reconciliations. Most importantly, COBRA administration has gotten substantially more complex with the passing of the Stimulus Package making complying with regulations even more difficult. Having an outside organization for these issues will save a considerable amount of time (and likely money).

4. Say Goodbye To Payroll Processing

Another way a PEO/ASO can save your staff time is by taking care of payroll and administration services. PEO/ASO’s can prepare and deliver payroll to your employees, as well as, take into account the necessary taxes. These taxes include Social Security, Medicare, FIT, SIT, FUTA, SUI and others. Your PEO/ASO can manage vacation and sick time accruals as well. Moreover, your PEO/ASO prepares and files all of your quarterly and annual reports, FICA, FUTA, and SUTA, W-2s, etc., freeing up more time for your employees to focus on their core responsibilities.

5. Outsource HR – The Easy Way to Resolve Disputes

By outsourcing employee issues such as compensation, payroll, unemployment claims and other problems you will save yourself a ton of headaches. Furthermore, by adding a third party that can help in any disputes between an employer and the employee, you will be providing an easy way to resolve any issues out of house. Not having to deal with these kinds of issues in-house is enough of an incentive for many companies to use a PEO/ASO.

These are five great reasons a PEO/ASO could save your company a substantial amount of money. By outsourcing many tasks to another organization, you will be decreasing your liability, as well as, the amount of on-site employees you have in your business, reducing labor costs. Not every PEO/ASO is the same for the best fit for your company. Click on the link below to learn important details you will want to know before hiring a PEO/ASO.

Go here for more on PEO and ASO services.

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The IRS plans to increase federal employment tax audits this fall and is focusing on four issues: worker classification (the employee versus independent contractor issue); fringe benefits (taxable versus tax-free); officer’s compensation; and reimbursed expenses. The IRS audit program will select employers for audit based on a statistical sample. While the audit program is not focused on fraud, the IRS has also increased the number of investigators looking into employment tax fraud by 249 percent and, according to the IRS, the average sentence imposed on those convicted of tax fraud runs 29 months.     Maryland, the governor has created a task force by Executive Order to enforce the Workplace Fraud Act of 2009 aimed at improper classification of employees as independent contractors. Though the act was aimed at the construction and landscaping industries, the task force is not as limited in its focus and can look further af

Click for assistance with phoenix payroll & arizona payroll tax matters.

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