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San Francisco Employers

Business Growth, Employee Benefits

Can San Francisco Bay Area Businesses Still Get the Employee Retention Credit?

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Everybody keeps saying we’re slowly leaving the pandemic behind – and for San Francisco Bay Area businesses, that means that pandemic tax relief is disappearing, too.  But can you still qualify for one of the most popular of the Covid-related federal breaks: the Employee Retention Credit (ERC)? Here’s the deal: you have likely heard from friends or heard aggressive marketing campaigns that are promising the moon. BELIEVE ME when I tell you how the tax professional community has been viewing these companies – it isn’t kindly. And now Congress and the IRS are gathering themselves to bring down the hammer on overly-aggressive claims in this area.  So today I want to separate truth from hype. But if you want to talk more about it one-on-one, let’s get something on the schedule:(408) 775-7790 But let’s dive in, shall we? Can San Francisco Bay Area Businesses Still Get the Employee Retention Credit?“You must pay taxes. But there’s no law that says you gotta leave a tip.” – Ad for Morgan Stanley The Employee Retention Credit (ERC) is gone now, but it might be worth the trouble to retroactively file certain quarterly tax returns and try to get money back. Here’s what you should think about. Running the numbers The ERC was designed to help San Francisco Bay Area employers like you keep employees on the payroll during the tough times of the pandemic. The credit was based on qualifying wages paid to employees and was quarterly-based relief for 2020 and most of 2021.  Generally, to qualify a company had to experience a significant decline in gross receipts, shut down on government orders, or have suffered supply chain disruptions. For tax year 2020, you qualified in any quarter in which your gross receipts were less than half of those in the same quarter in 2019 (with some additional details). For 2021, you could claim the ERC in any quarter in which gross receipts were less than 80% of those in the same quarter in 2019 (or 2020 if your company wasn’t old enough). (Figuring your gross receipts isn’t as simple as just looking back through your books. You may qualify even if you don’t think so at first glance. Reach out to us.) Slightly different versions of the ERC are available depending on your company size. You calculate the amount of ERC using the payroll for full-time employees (and, with some additional math, part-timers, too). Qualified wages were generally gross wages plus employer health insurance costs.  The maximum credit was $5,000 per employee for all of 2020 and $7,000 per quarter per employee for 2021. If you qualified, you could (and still can) claim the ERC for qualified wages you paid in all four quarters of 2020 and in the first three quarters of 2021. “Recovery Startup Businesses” that opened after Feb. 15, 2020, and that had annual gross receipts of less than a million bucks could also claim wages for the last quarter of 2021. The recovery startup ERC limit was 50 grand per quarter; the credit was equal to 70% of qualified wages paid to employees in each quarter. Employee Retention Credit Re-filing You can still amend the IRS Form 941 for the quarters where you now think you qualified. To amend, you need to file Form 941X. Each of your quarterly 941s is considered filed by Tax Day the following April. You have three years from these filing dates to amend previous filings to try for the ERC: Tax Day in April 2024 or April 2025 depending on whether you want to apply for the credit for 2020 or 2021.  You’ll need documentation to prove your decline in gross receipts or to prove that you were subject to a government-ordered pandemic shutdown. Undocumented claims about supply chain disruptions won’t help you get an ERC.   Step right up The ERC changed frequently and has confused a lot of people. For instance, the American Rescue Plan extended the ERC to the end of 2021, although the Infrastructure Bill passed in November 2021 ended the ERC retroactively on Sept. 30, 2021 – but not for Recovery Startup Businesses. Got all that?  Some other points of confusion include…  I heard a guy on the radio tell me he could get me thousands back for the ERC overnight …  Boutique ERC mills have cropped up lately, promising the moon for a cut of your easy credit money. Except:        While I want to equip you with tools and data to take advantage of those tax-reducing deductions like the Employee Retention Credit as long as you can, I also want you to understand the situation fully and have someone on your team that you trust to give it to you straight. That’s one thing you can depend on when you come to me. And I’m happy to help… Helping your San Francisco Bay Area business, Patti ONeill and Gale Bergado(408) 241-4100ONeill & Bergado

Business Tax Planning

Changes to Your San Francisco Bay Area Business’s Social Security Payroll Taxes

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Have you recovered from the electoral drama yet? Allow me to quickly remind you: No matter how you’re feeling about these results, what matters MOST is how you operate that which is under YOUR control. And I say that as somebody whose entire work is driven by decisions made by Congress and the IRS. So, let’s keep on trucking towards our goals, and keep this stuff where it belongs – as background noise.  You’ve been faced with a lot of changes the past year… two years – ok, three years. I have to take a second to really commend you on your resilience in these times. As a business owner, being able to take a few hard-landing punches and still stay in the fight takes grit.  And I like to consider myself your ringside coach in this fight. And more than just a little “attaboy,” I’m here to help you strategize and come out with the win in your San Francisco Bay Area business. So as the year hurtles towards its end, that means thinking about the last moves you can make to see those goals you had get checked off your list. Ready to get a little “ringside” chat in? I’m right here: (408) 775-7790 Now, speaking of one of those changes, you may have to help your employees navigate a change that’s coming to social security payroll taxes starting 1/1/2023… And if payroll is something you want us to help you with, drop me a note. Changes to Your San Francisco Bay Area Business’s Social Security Payroll Taxes“It’s not the load that breaks you down, it’s the way you carry it.” – Lou Holtz You may have heard about the recent increases coming to Social Security benefits: the biggest hike in decades. Seems inflation’s getting into everything, including taxes for your employees.  Starting next year, your workers will have to earn more before they’re exempt from having Social Security taxes taken out of their paycheck.  Here’s what to know about the changes to social security payroll taxes.  The up and up Most people have heard by now that Social Security recently gave benefits recipients the biggest cost-of-living adjustment (COLA) since 1981 – good news for a lot of folks fighting inflation. But increases were also reflected in another Social Security formula, this one affecting your San Francisco Bay Area company.  Starting next year, the base annual wage for computing Social Security tax will increase to $160,200 – up from $147,000 for 2022. Wages and self-employment income above this threshold won’t be subject to Social Security tax.  As a reminder, employers, employees, and self-employed workers have to deal with two taxes from the Federal Insurance Contributions Act (FICA): Social Security (aka the old age, survivors, and disability insurance taxes), and Medicare (the “hospital insurance” tax). For almost a century now, FICA has partly funded Social Security programs. Social Security benefits recently bumped with the big COLA are funded from the general tax base, not specifically by FICA payments. Medicare was added to paycheck withholdings in the 1960s.  The Social Security tax has a maximum; the Medicare tax doesn’t.For 2023, the FICA tax rate for employers remains the same as this year: 7.65%, broken down into 6.2% for Social Security and 1.45% for Medicare. That makes your workers’ maximum Social Security tax $9,932.40 for 2023.  If you’re self-employed, your Social Security tax of the full 12.4% on the first $160,200 of SE income translates into a maximum for 2023 of $19,864.80.  Just to review… You withhold a 6.2% Social Security tax from your employees’ wages and you pay an additional 6.2% (your “employer share”) – which combined makes the full 12.4%. You as an employer also withhold a 1.45% Medicare tax from your employee’s wages, and you pay an additional 1.45% employer share for a total of 2.9%.  As an employer, you do not pay a portion of the 0.9% Medicare surtax (aka the Additional Medicare Tax) for your high-earning workers ($200,000, for instance, for an employee who files his or her taxes using the status of Single), though you do withhold this amount when employees hit that pay threshold. And once you begin withholding that surtax, you withhold it every pay period until the end of the calendar year. A few questions about social security payroll taxes Compliance with FICA and employer’s taxes is nothing to fool with. Here are some good questions to ask yourself before the calendar flips. Does one of my employees also have other jobs?Not an uncommon situation these days. You might want to check this with your workers. Each employer must withhold Social Security taxes from that person’s wages even if the combined withholding exceeds the yearly limit. (When they file their tax return the following year, the employee can seek a credit for the extra that was paid in.) What if my employees make tips? Employees who get 20 bucks or more in tips in a calendar month should be reporting them to you the following month. You’re responsible for withholding employee income tax and the employee’s share of FICA taxes and paying the employer’s share. But check with us about the FICA tip credit you might get against the income taxes for FICA taxes paid on certain tip wages.  What’s “Medicare mismatch?” This applies to that 0.9% Medicare withholding for high earners on your staff. You’re obligated to withhold that amount (but again, not pay an equal share) regardless of whether your employee will owe the surtax depending on their filing status and what their spouse makes if they’re married (and, for that matter, whether their spouse also works for your company).  If misunderstood, this can make for over- or under-withholdings.  How do I keep track of the changes? Your payroll software should automatically update a change this significant. Now’s the time for you to make sure, while there’s still some 2022 left. Now changes like these can have you sitting back and wondering what to do to absorb them and work with them.  That’s why I write to you. If you’ve got questions about the changes to social security payroll

Business Growth, Business Tax Planning

Employee Gifts: Some Ideas for San Francisco Bay Area Business Owners

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Time is counting down until the year is up and your tax impact opportunity window closes. And even if this is the busiest (and perhaps most profitable) part of the year for your San Francisco Bay Area business, opening up a little space in your calendar to talk about some year-end tax moves is only going to mean good things for it.  Let’s make sure you’re set up to get some potential last-minute tax savings. Grab a time with us here:Patti (408) 775-7790  Gale 408-775-7800 Another thing you’re probably thinking about this time of year is how you’re going to express your gratitude to your awesome staff via a year-end bonus or some such.  Of course, this isn’t an area where you shouldn’t merely be optimizing your bottom line. This is a chance to create some joy around your business – I suggest you take it. But with our macroeconomic picture growing ever tighter, finding the right way to let your employees know you appreciate them without shelling out a crazy amount might call for some creativity.  I’ve got some ideas for you on the year-end employee gifts front… Employee Gifts: Some Ideas for San Francisco Bay Area Business Owners“Feeling gratitude and not expressing it is like wrapping a present and not giving it.” – William Arthur Ward That time of year again. Trouble for some small companies is, it’s that time in what may be yet another year of struggling on the bottom line. Still, you want to thank your employees for their hard work. How do you give EOY employee gifts without breaking the bank?  There are many ways to say “thank you” quickly (even as 2022 runs out), even if you’re cash-strapped.  Hint: Go for more bang than buck. EOY Employee Gifts: Tax considerations If you give gifts as part of doing business — including thank yous for employees — you may be able to deduct all or part of the cost, but no more than 25 dollars for business gifts to each person during your tax year. Incidental costs — engraving, decorating, packaging, mailing — are generally not included in that limit. Holiday gifts fall under de minimis benefits — what the IRS terms an item “considering its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical.” (The IRS has previously ruled that individual items worth more than 100 dollars aren’t de minimis, just so you know.)  Cash or cash equivalent items (gift cards and the like) are never excludable from income. Gift certificates that allow your employee to receive an item that’s minimal in value, provided infrequently, and is “administratively impractical to account for” may be excludable as a de minimis benefit, depending on facts and circumstances, IRS says.  Whenever everybody’s favorite federal agency starts using phrases like “depending on facts and circumstances,” it’s only sensible to have a few questions. Feel free to check with us. EOY Employee Gifts: What to give Gift cards. These are first to mind these days, and they offer a lot of pluses for both giver and receiver as an appreciation gift: flexible amounts (easy on your bottom line), fast delivery (whether plastic or electronic), and available for a lot of products from electronics to gas to food to clothes.  If you’re trying to say thanks while watching your budget, the thought really counts. If your staff size allows, try to get each person something they as an individual would like. Maybe one of your folks is always talking (when they should be working, but that’s a story for another time of year …) about the movie they just went to. Maybe another staffer shops at Target every single weekend. Tailoring a gift card to such folks is easy, and they’ll appreciate even a smaller gift if they think you devoted thought to it.  Name brands might also buy you more appreciation than embossing. Is the expense of putting your company name on something really going to impress an employee more than a retail name they respect (Yeti tumblers and mugs, for instance, or a North Face beanie)? Work-related. Too often all of us fall back on a coffee mug with the company name. That can work of course, but what about comfort at work? Use your eyes and ears for a few days and see if somebody would like a blanket to keep at their desk. Or a recharging station, a lunch box or bag, a desk fan, or a smartphone pop socket. Do they eat lunch at their desk? How about a desktop vacuum cleaner?  You can get many of these for little more than a $20 bill — and every time your folks ward off a chill or cool down after coming in from lunch, they’ll think of you. With fondness. And that’s one of the big points. (These gifts work for either remote or in-office situations, by the way.) For the individual. Again, if staff size allows, think for a sec or ask a few questions discreetly of co-workers. Does your staffer love or despise candy, honey, chocolate, or cookies? Don’t leap at these choices just because they’re familiar. Does the worker embrace green living(stainless steel straws)? Spend a lot of time outdoors (sunscreen, lip balm, or touchscreen gloves)? Travel a lot (sleep mask, neck pillow, or packing cubes)?  A last point: Give the gifts in a way that embarrasses no one. Maybe leave it on their desk with a nice wrap job and card when they’re not looking. Email them the electronic gift card on the weekend.  A little effort can help make sure the delivery is part of the gift, discreet, and individual. After all, that doesn’t cost anything. Maybe the employee gifts puzzle isn’t as much a money and tax matter as other questions, but we’re ready to advise on all your San Francisco Bay Area business needs. In your corner, Patti ONeill and Gale Bergado

Business Growth

Remote Work & Your San Francisco Bay Area Business Insurance Policy

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Now that we’re through January (and all of the 1099’s and payroll-related information returns), we take a small breath … but then things start ramping up again for us here at ONeill & Bergado. So let this serve as an early notice that it would be a very good idea to get on our calendar as soon as you’re able.  And I’m well aware that this takes time for business owners. But this is also what we’re here for — feel free to reach out with any questions about what we’ll need from you to begin our return preparation processes.Patti (408) 775-7790  Gale 408-775-7800 (And also, you don’t have to wait to get your books in order or your tax records organized or your tax strategy optimized. We can do that all year long, and it really helps to take a year-round approach to this part of your San Francisco Bay Area business so that tax season is less stressful and you don’t have to delay getting everything submitted to the IRS.) Leaving all that aside, I’ve been thinking about how lockdowns, whether locally or nationally, gave us all a taste of the work-from-home (WFH) life and shifted so much of the American — and global — work world. As a business owner, you’ve likely been forced to find new footing when it comes to hiring and managing employees.  More and more people want a work-from-home option (wearing stretchy pants instead of office wear and time flexibility are too alluring to give up so easily). It seems like many office-based businesses have struck an accord with this reality, most offering hybrid work options if not fully remote work jobs. (And some, of course, have no provision for this … plumbers can’t WFH in stretchy pants.) But if your business is built to handle WFH, there are new concerns to think about. Yay! With the move to fully cloud-based business operations, your business via remote workers could be vulnerable to cybercrime. And then there’s “workplace” safety to consider, time-wasting, communication struggles, and (what I want to talk about today) insurance coverage for your workers. Let’s dive in to business insurance policies. Remote Work & Your San Francisco Bay Area Business Insurance Policy“Out of sight, out of mind. The absent are always in the wrong.” – Thomas a Kempis Not long ago, your insurance needs were clear for protecting your workers and your company, but workforces changed in the past few years: Chances are good your company has more remote workers than ever.  Surveys say that post-pandemic workers still expect to work remotely at least one to three days a week. Workers say they’re happy, saving commuting time and bucks. Most remote workers think their bosses will let them keep working outside the office — and many would even take a pay cut to keep working that way. But when exactly is a worker toiling away “remotely?” And what does a far-flung staff do to your need for your business insurance, an expensive level of protection that’s dictated primarily by physical presence?  Different dangers Not all off-premises work is the same. “Work from home” often involves part of a workweek in a company location and part in the staffer’s home or other location. “Remote work” is working from home full-time. Recognizing this difference partially dictates how your business insurance needs might change. A common insurance concern for employers used to be an employee (full- or part-time didn’t matter) falling in the office due to negligent maintenance. Still a worry, of course, but no longer as common since remote workers aren’t around to trip on a loose floor tile.  With a staff of remote workers, your danger of potential damages has changed. More likely today is cybercrime; company equipment in your worker’s home is also more likely to suffer damage from anything from a spilled coffee to a living room window left open in a rainstorm. (Your remote workers might be slow to admit it, but they’re more likely to be distracted at home.)  Are you responsible? Yes, practically speaking: Injury during employment may fall under Workers’ Compensation. Your potential liability is unchanged – though a case always depends on circumstances and state workplace laws regarding proof that the injury happened due to employment.  (The same generally holds true for property damage and other types of insurance. Employees’ homeowners’ and renters’ policies typically don’t cover work-related claims, by the way. Your health and dental benefits for worker will probably remain largely unchanged by remote work, too.)  But a worker not being on your premises multiples the variables. When and when in their home did the injury or accident occur? What distracted them at that moment? Was the person hurt doing your business or doing their laundry?  Note one other pandemic-related break in your liability: If you don’t force them to come into your office, they can’t factually claim that they contracted Covid on your premises or during their employment with you.  What you can do So your business insurance needs continue more or less the same given remote work, at least for now. But insurers have always been known to give a break on premiums if you do things to lower their chance of parting with money.  Will your carrier cut you a deal if you verify (in writing) that work you’ve asked for can be done safely in a home? If you helped your employee create a safer work-from-home space and you gave them the right equipment to safely do the job? (Document this — always document everything that might make your argument for lower premiums.)  While bending the ear of your insurer, confirm whether your business insurance policy covers work equipment that’s not on your premises. And ask about a remote-worker break on your biz insurance — a relatively new idea for carriers, but it could be time for a smart insurance company to offer it and lock in customers.  Also:  Cybercrime Your biggest hole runs right through your remote workers’ computers. Off-site, these machines are beyond your real control even if you

Business Growth, Employee Benefits

Claiming the WOTC While Hiring in Your San Francisco Bay Area Business

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Firstly, we are barrelling towards the March 15th deadline for corporate tax returns.  Patti (408) 775-7790 Gale 408-775-7800 Secondly, how is your staff situation these days? Hiring and keeping workers is still one of the greatest obstacles I find my San Francisco Bay Area small business clients to be facing right now. Especially here at the beginning of the year, when workers tend to cut out after year-end bonuses in search of greener pastures at competing businesses — often larger ones.  And the reality is, you as a small business owner are going to have a difficult time keeping up with the demands an inflationary environment has created, especially in terms of paying as competitively as, say, a big corporation. So, you’re going to have to find new ways to hire and even retain your employees. But you can still do it. When you’re on the hunt for a real A-gamer new hire, sometimes you don’t have to look any further than your own team. Who is stepping up? Who is bringing lots of value? Who seems dedicated to building something with you? And keep this in mind: You have things to offer that big companies can’t — simply because you’re small. Things like: more extensive job training, personalized support, and even just relational equity that serves to keep people around and happy. You can still attract those A-gamers to your team with what’s already in your arsenal. And you can also claim a little tax break while you’re at it: the Federal Work Opportunity Tax Credit.  So let’s talk about letting Uncle Sam pay you for your hiring plans via the WOTC … Claiming the WOTC While Hiring in Your San Francisco Bay Area Business“A hand up is not a hand-out.” – Clara Barton I’m sure it feels like you need every edge when looking for employees these days. Imagine if you could get credit for that chore from Uncle Sam? Well — it turns out you can. The federal Work Opportunity Tax Credit (WOTC) is a federal break for employers (like you) in exchange for hiring those from groups “who have faced significant barriers to employment.”  It comes as no surprise that there are a lot of conditions, of course — so let’s take a look at them. Who to hire You can claim the WOTC for wages to certain individuals who begin work on or before December 31, 2025. The catch: Your hires have to be certified by your local state workforce agency as a member of a group generally considered in need of a job break. The groups are: ex-felons, recipients or family members of recipients of Temporary Assistance for Needy Families (aka a “qualified IV-A recipient”), many kinds of veterans, residents of empowerment zones (EZs) or rural renewal counties, some folks referred from rehab, those whose families get supplemental nutrition assistance, some summer help, recipients of supplemental security income benefits, or the long-term unemployed.  We don’t have room here for the rundown on all these groups, but here are a couple more details: A “qualified veteran” is a vet who’s any of the following:  A “qualified ex-felon” is someone you hire within a year of being convicted of a felony or being released from prison for the felony. A “qualified long-term unemployment recipient” has been unemployed for at least 27 consecutive weeks upon hiring and got Unemployment for some or all that time. (Get the full story on all the targeted groups from the IRS).  Pre-screening and claiming the WOTC  If you’re looking to hire, the American Job Center is one place to look for candidates. A state workforce agency or other participating agency can help you determine whether a job seeker may be in a WOTC-targeted group. A “participating agency” could include vocational rehabilitation agencies, city, and county social service offices, the local Department of Corrections, or the Veterans Administration.  You have to pre-screen your prospects and get certification from a state workforce agency that your applicant is a member of one of the above groups. (Find out more on that on the U.S. Department of Labor website.)  Before you make a job offer, both you and your applicant fill out an IRS Form 8850, “Pre-Screening Notice and Certification Request for the Work Opportunity Credit.” You don’t submit this form to the IRS, though, but to your state workforce agency within 28 days of the employee starting for you. (Fill in the dates on page two of the 8850 carefully …)  So what do you get? Generally, your WOTC equals 40% of up to six grand in wages (a max of 2,400 bucks — more for some groups, like veterans) you pay to an individual in their first year of employment and who does at least 400 hours of service for you. You can also get a 25% rate for wages you pay to those who 120 to 400 hours.  Employers of all sizes can claim the WOTC, including both taxable and certain tax-exempt employers (you file different forms — we can show you). There’s no limit to the number of individuals you can hire as part of the program and no cap on the amount of credits you can claim — but yes, it wouldn’t get a tax break without some conditions. Here are a few:  Hopefully, this overview shows you that although it may feel like you can never catch a tax break when you run your own San Francisco Bay Area business, that’s not true (at least — not all the time). If you’re interested in taking advantage of the Work Opportunity Tax Credit, let us know. We’d be happy to help you look into the ways it could benefit your business. Always here to help, Patti ONeill and Gale Bergado

Employee Benefits

Prioritizing Employee Wellness in Your San Francisco Bay Area Business

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It’s a bit of a dog-eat-dog world for businesses these days. (Feel that sentiment in your bones?) Inflation is pervasive. Supply chain issues still have you jumping through hoops to get products. The hunt continues for good help… proving the adage. Covid-era debts now have to be repaid. Taxation is amping up. And there’s more where that came from. Keeping up with everything certainly takes its toll. So, let me ask you… what are you doing to find the positives and overcome the challenges? The owner road can be lonely and daunting. And you’re carrying the load of running and growing your business.  If you’re having trouble finding a way through the mounting economic pressures and keeping your San Francisco Bay Area business healthy, maybe it’s time to sit down and take a look at things. My team and I can help you cut through the noise to find what will work for your business right now. So, if you need to and when you’re ready, let’s get something on the schedule: Patti (408) 775-7790  Gale 408-775-7800 A healthy business owner is a non-negotiable for a healthy business. Healthy employees are the other side of that coin. That’s as much about physical health as it is about the mental and emotional side of things. It’s not enough to simply pay your employees for a job well done and cut a bonus once in a while. You’ve got to build an environment that makes your workers want to keep coming back.  Intentionality is a game changer with staff. Trust me, they’ll sit up and take notice when you start shifting company policies that are conscious of their health.  So, what does prioritizing employee wellness look like? Let’s find out. Prioritizing Employee Wellness in Your San Francisco Bay Area Business“Take care of your body. It’s the only place you have to live in.” – Jim Rohn What are the best metrics for company health? We small-business owners tend to hone in on bottom lines and numbers to tell us our company is healthy. But there are all kinds of health and all kinds of ways to preserve it for your staff — from comfort to culture to cutting stress in everyday tasks. There are tactics you can use to alleviate stress and impact your staff’s sanity, productivity, and ability to avoid mistakes.  Let’s look at three ways you can prioritize employee wellness right away.  Employee Wellness Idea #1: Spatial recognition The first thing most people think of with workplace health is ergonomics, the study of people in their working environment to prevent discomfort or injuries — or, in plain English, making sure everyone has the most comfortable workspace possible. Anybody who’s had an aching neck or a pain singing up their mouse arm after a few hours at their desk knows exactly what we’re talking about.  If you have workers who sit at a computer:  Employee Wellness Idea #2: Culture Scads have been written about company “culture”… but what does it mean, and how does it relate to employee health?  Most small business owners liken company culture to game nights and regular Zooming. Let’s broaden that horizon. Have you ever considered how power is… well… empowering? It generally leads to people feeling better about themselves and about where they spend their workdays.  We realize that this goes against the grain of some leaders in companies, but you can’t be the bottleneck for the growth of your company. If you feel you’re the only one who can do something in your company, you probably are — and that stunts real growth.  Employee Wellness Idea #3: ‘You’ve got stress’ Stress is the enemy of a healthy workspace. Some workplace experts say one good way to attack stress is to cut back on the “always-on” notion that workers must be online and available every minute of every day (and sometimes night). The experts, in this case, are right. Some measures protect and respect focus. Start with your email:  Employee wellness is worth it. Cultivating a company that runs smoothly and happily is our biggest passion here at ONeill & Bergado. Let us know if there’s anything we can do for your San Francisco Bay Area business. To health and happiness, Patti ONeill and Gale Bergado

Employee Benefits

Compensation Is Just the Start, San Francisco Bay Area Business Owners

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We’re just over a month away from the MLB playoffs, and this year (like every year) has had its share of sketchy calls that fans and players have been unhappy about.  While not everyone’s favorite summer pastime (the sports season that never ends still has more than two months of games to go), this summer there are seemingly more strike calls than ever happening beyond the diamond. UPS, Hollywood actors, and screenwriters, food service workers in Vegas, United Auto workers, LA city employees … even doctors in the UK are getting in on the action. And they’re striking over more than just compensation. The recent SCOTUS ruling makes way for businesses to sue unions for financial damages caused by strikes, but despite that extreme (and expensive) legal protection, many employers are understandably nervous. Now, most San Francisco Bay Area SMBs like you don’t have to worry about a mass walk-out like these major industries are experiencing, but you do have to deal with the issue of disgruntled employees who want better compensation, benefits, working conditions, or company policies than they’re currently getting. You know what I’m talking about. So it’s worth spending time thinking through how you as an employer can manage to keep your workers happy when they ask for more while shielding your bottom line at the same time. This is about staying in business, too. Let’s go there today. Compensation Is Just the Start, San Francisco Bay Area Business Owners“When you take care of your employees, they take care of your business. It’s as simple as that.” ― Richard J. Daly Happy employees are the backbone of any successful organization, as you have probably learned from experience in dealing with staff on both sides of the spectrum. And research says so too: according to a study by Gallup, companies with engaged employees outperform those without by a whopping 202%. But we know keeping satisfied workers is not just about compensation; there are other non-tangibles you can offer to maintain a happy workplace, and much of that can be demonstrated during the negotiation process. How UPS Averted A StrikeYou’ve heard by now that UPS reached a deal with employees in late July to avert a threatened strike. This year’s negotiations between the company and the teamsters’ union representing employees went better than it did in 1997, when 185,000 UPS workers went on strike for 15 days, creating havoc in the shipping industry. But this time around, both sides voiced their satisfaction with the deal’s terms, which included compensation increases, new hires, comfort and safety improvements in trucks, and other changes to overtime and seasonal work policies. Negotiations lasted just over five weeks. This very recent example of a reached deal demonstrates that negotiating with employees can be a delicate dance, but success is always possible, even in complicated situations (like 340,000 workers in the balance).  So let’s talk about a few of the right moves you can make, regardless of the compensation terms, that can help usher in a win-win situation. ListenDo this first, and not just for formality’s sake. Listen actively to your employees’ concerns and requests while remembering that you were in their shoes at one time. Keep the lines of communication open and make sure your workers feel heard. This fosters trust, which is the key to not just a successful negotiation process, but also to retention and a positive workplace culture. Do Your Research Come into the conversation having researched industry standards for compensation and benefits. Use statistics to back your proposals, making it clear that you’re offering a fair deal based on what’s happening in the market today. A data-driven approach can help lend credibility to your negotiations. Be FlexibleNegotiations involve give-and-take so be open to compromise. Consider offering different options for compensation and multiple solutions to alleviate their other concerns. This can create an atmosphere where employees feel more involved in the final solution because they can choose what suits them best. These are days when San Mateo employers have to offer more than higher compensation terms to attract and keep employees, and these principles are applicable to a business of any size in any industry.  My main goal in sharing these values I’ve learned over the years is to remind you that this process doesn’t have to be a battle. It can be a collaborative and peaceful effort where both parties leave satisfied.  A win-win is good for everyone. We’re on your side, Patti ONeill and Gale Bergado

Employee Benefits

Work From Home Policy for San Francisco Bay Area Businesses

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There’s no better way to celebrate work than by taking a day off. The irony of the Labor Day holiday gets me every year, but I do hope that it provided a little extra rest on the front end of a busy fall season. I mentioned in one of my recent notes another piece of irony: how Zoom recently started requiring their employees to come back to the office. Where are you on that journey? If you pivoted to remote or hybrid work models for your employees post-2020, what is your work from home policy looking like these days? If there’s one thing that San Francisco Bay Area business owners in WFH-friendly industries would be wise to pay attention to, it’s that workers still really value having the freedom to work remotely. A full 98% of workers report a desire to work remotely at least some of the time. And the trend still has traction — as of 2023, a little over 40% of the workforce either works from home or operates in a hybrid work environment. But when safety concerns are no longer the banner over this arrangement, business owners find themselves weighing the costs. So today I want to delve into some of the dynamics of creating a work from home policy that incorporates the increasingly popular hybrid work model, but with boundaries that benefit both business owners and employees. Work From Home Policy for San Francisco Bay Area Businesses“Where we’re going, we don’t need offices” ― Doc Brown, ‘Back to the Future’ Now that we’ve mostly accepted the WFH shift in work culture, we’re fully into the weeds of how to make it work long-term, which presents both opportunities and challenges. Based on my conversations with business owners in our area (and beyond), there are themes to the concerns that are voiced.  One of the foremost concerns for business owners is ensuring that employees remain productive and accountable while working from home, despite the statistics showing that remote employees tend to be more productive than their office counterparts. (A study by Stanford University found that remote workers were 13% more productive than office-based workers.) Another question being asked is how to ensure the security of data on external systems. And then there’s the need to maintain a spirit of teamwork and camaraderie in a setup where face-to-face interactions are minimal. So let’s talk about how to address these very legitimate concerns when developing your work from home policy. 1) Maintaining Cybersecurity: Protecting Your Business and Employees It goes without saying that cybersecurity is paramount. Your work from home policy should outline clear guidelines for safeguarding sensitive information. Require the use of secure virtual private networks (VPNs), encrypted communication tools, and strong password protocols. Educate your employees about phishing scams and the importance of keeping their devices updated with the latest security patches. 2) Fostering Relationships: Creating A Healthy Workplace Culture There are still ways to build into a spirit of teamwork, but it will look different than before. Organize digital team-building activities, such as weekly video check-ins, virtual coffee breaks, or even online team games. But most importantly, set up a dedicated virtual space where employees can engage in casual conversations and share personal updates. This is a way you can mimic the daily interactions that would normally happen in the office break room or hallways. 3) Maintaining Productivity: Balancing Trust and Accountability Monitoring work productivity doesn’t have to equate to constant surveillance. It’s not like you were constantly looking over their shoulder at the office so take a similar approach here. Implement tools that allow employees to track their own tasks and progress, which can help foster a sense of autonomy and ownership. Regular check-ins and goal-setting sessions can help maintain accountability while empowering staff to take ownership over their time. An effective work from home policy requires a thoughtful approach that is outside the box of “what we’ve always done.” Such are the times we live in as San Mateo business owners, where adaptation is the lynch pin of survival. But I want you to do more than survive, and that’s why I do what I do. Let’s build your business. I’m here to help you expand your financial future:Patti (408) 775-7790  Gale 408-775-7800 In your corner, Patti ONeill and Gale Bergado

Business Tax Planning

Alternative Approaches To Paid Time Off Policy for San Francisco Bay Area Businesses

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October is right around the corner. So is the October 15th extension deadline. And so is the fourth quarter for your San Francisco Bay Area business. As we approach Q4, be mindful of the usual year-end accounting needs and reporting requirements that will be popping up. We’ll keep you informed of changes coming, but please do reach out proactively to begin preparing if you haven’t already: (408) 775-7790  And with the start of a new year coming in just a few months, it can also be a great time to reevaluate some of your company benefit packages that will be rolling over on January 1. Specifically, your “use it or lose it” paid time off (PTO) policy. Not all companies take this approach, so let’s discuss some alternatives that are out there. Alternative Approaches To Paid Time Off Policy for San Francisco Bay Area Businesses“A vacation is what you take when you can no longer take what you’ve been taking.” ― Earl Wilson If your paid time off policy hasn’t changed in decades, it may be time to take note of the latest statistics regarding PTO and the challenges that both employees and employers are navigating.  The Current PTO Landscape Utilization gap: Only four out of ten workers use all their allotted days of leave each year, leaving 60% struggling to use it all effectively. (Source: Human Resource Management) Job demands: One in three workers find it hard to take their vacation time due to demanding job responsibilities. (Source: Indeed) Special situations: Some employees save their PTO for special occasions, lack the funds for a vacation, or simply feel guilty about taking time off. Interest in other options: Surprisingly, 83% of workers express interest in converting PTO into other financial resources. (Source: MetLife) These are situations when PTO can become more of a burden than a benefit. So let’s talk about other options you have as an employer. Offering Unlimited PTO The concept of unlimited PTO gained popularity around a decade ago, with companies like Netflix offering this perk to their staff. This kind of arrangement can boost productivity and morale, remove the pressure of having to work while sick, and can be used as a great recruiting tool for a population looking for more flexibility and freedom in their work. But time has shown that it might not be the ideal paid time off policy for everyone. Nearly 30% of Americans with unlimited PTO policies end up working during their vacations. Others avoid taking vacations to meet unspoken work expectations, leading to burnout. Note: If you decide to adopt an unlimited paid time off policy, consider setting a minimum annual vacation requirement to encourage employees to take time off for genuine relaxation. Combining Vacation and Sick Time Many employers are moving towards PTO banks that don’t distinguish between sick leave and vacation time. This approach has seen positive results, including a decrease in unscheduled employee absences and reduced HR tracking efforts. But it’s not universally popular among employees, especially those with high healthcare needs, who report finding themselves using a significant portion of their time off for medical reasons. And some say it could backfire and incentivize sick employees to come to work so they can save PTO for vacation. Note: Before implementing a combined PTO policy, be aware of state and local laws that may restrict or regulate its usage, which can vary from state to state. Converting PTO Into Actual Money This paid time off policy allows employees to cash out their unused PTO for other benefits. Instead of losing unused PTO or being constrained by calendar timeframes, employees can choose how they want to use their earned time off. Employees can convert PTO into cash for various financial purposes, such as building an emergency fund, contributing to a Health Savings Account (HSA), or adding to their retirement accounts.  For you as an employer, it could potentially reduce the liability and administrative burden associated with PTO management. Note: Don’t forget to consider the tax implications and reporting requirements when implementing PTO conversion policies. This includes adjusting payroll taxes and complying with IRS regulations for contributions to HSAs and retirement accounts. Ultimately, the best PTO policy for your San Mateo organization will depend on your specific needs and goals. But this is one of those small changes that could make a big impact for your organization, both in hiring and employee management. I can help you assess the impact on your bottom line. Helping you think outside the box, Patti ONeill and Gale Bergado

Employee Benefits

A PTO Payout Policy Checklist for San Francisco Bay Area Business Owners

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This weekend’s news coverage and social media scroll were dominated by reports of the awful things happening in Israel right now. It’s pretty difficult to swallow the images of violence and abuse being perpetrated by Hamas. And no matter how many times you hear about these kinds of things, it never gets easier.  But even with difficult things like this, be mindful of letting your thoughts and feelings be dominated by the coverage. There will always be something to read and take in, but these things have a way of igniting emotions to a breaking point if they’re not regulated.  And, as a business owner, you need to make sure a good portion of your energy is spent on what pertains to your business.  Before I move on, let me also briefly address what you should do if you have an Employee Retention Credit (ERC) claim submitted to the IRS that’s been put on pause. The primary thing you need to keep in mind is that if you get faced with an audit about the claim, the IRS will want concrete evidence and documentation to support your eligibility. So make sure you have that in order. It’s your best defense against over-zealous investigators.  So, on to what I want to discuss today. I wrote recently about some of the other paid time off policy options out there for businesses to offer besides the “use it or lose it” approach. A fellow San Francisco Bay Area business owner responded to share how she was kicking herself for not having more clearly defined PTO payout rules in place in her own office.  She had apparently found herself in a financial pinch when two of her staff resigned and opted to take their unused vacation days as paid time after their last day in the office. Because she had no PTO payout rules in place to govern when employees could take that benefit (her state doesn’t require payment of accrued vacation time upon separation), she opted to pay those staff members for their unused days to avoid potential legal confrontation over her vague vacation policy wording. That’s a place none of us want to be in, especially because it’s entirely avoidable. So with that in mind, and as we’re rapidly approaching EOY, I’d like to show you some policies to make sure you have included in your official vacation benefit package. A PTO Payout Policy Checklist for San Francisco Bay Area Business Owners“The biggest lesson I’ve learned by living a little is you should always put things in writing.” ― Richard Branson Because PTO payout rules vary from state to state, you’ll want to start by verifying the local laws you’ll need to abide by first. You can find those PTO payout laws by state here. Whether your employees get paid for their unused vacation days when they say their goodbyes depends on two things: your company’s policy and your state’s laws. Some states have specific rules about this, while others leave it up to the employer. In most cases, it’s the company’s call. You decide whether or not to dish out some extra cash for those unclaimed PTO days when an employee leaves. But here’s my main point today – you need a well-defined PTO payout policy in place to guide this process. I should point out that there’s technically no federal law that forces businesses to offer PTO to their workers. It’s not a requirement. But, let’s be real, offering PTO makes for happier employees and will help you attract better talent. Now, if you’re thinking about creating or changing up your own PTO payout policy, here are some definitions and provisions to include: 1. How payout is calculatedYou (the employers) are responsible for stating how PTO hours are tallied and calculated, while also withholding taxes according to IRS regulations. Vacation pay doesn’t always fall under the category of supplemental wages, but when it’s disbursed as a vacation payout, it becomes subject to a flat 22% supplemental income tax. 2. How to handle sick daysIn 14 states and Washington, D.C., employees have the right to get paid when they’re sick. It’s a state thing, not a national one. So, think about whether you want to pay your employees for unused sick days when they leave. 3. Timing of payoutIf you’ve got a policy for paying out unused PTO, there’s usually a deadline. Most times, it’s within 30 days after the employee leaves. 4. The reason for separationIn some states, it doesn’t matter if an employee gets the boot, gets laid off, or decides to call it quits – they still get paid for their unused PTO. But that’s not the case everywhere. Some places let you decide if the reason for their departure affects the payout. If your state doesn’t spell it out, make sure your policy does. Now, this list isn’t comprehensive. There’s more to it, and that’s where an HR pro can lend a hand. They’ll make sure your San Mateo company’s policy abides by local regulations while also contributing toward a happier workplace. To being prepared, Patti ONeill and Gale Bergado

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