Chris Cooley (00:31.098)
Alright, I want to thank everyone for being here today on my HR Buzz the podcast. I think we’ve got a great topic as we’re getting to the end of the year. It’s hard to believe, but we wanted to just talk about things that maybe you want to consider as we’re coming up to the end of the year. That’s just good housekeeping. And for that we have Emily Frederick. With my char concierge with us today, I want to thank you for being here.

Emily (00:55.276)
Yeah, thanks for having me back.

Chris Cooley (00:56.996)
Yeah, she is a frequent guest and does a great job. So I thought this would be a great topic for us to discuss. So it’s hard to believe we are at year end.

Emily (01:10.527)
Yeah, I mean, it’s it just became fall like and I think that happened maybe just today. So the weather feels a little bit nicer. So it’s time to get into the end of the year housekeeping cleanup things that we all need to do.

Chris Cooley (01:23.248)
That’s right, that’s right. so, you know, especially before we get into the holidays, these are things that are great to just kind of start the process, right? And try to get them for kind of you know, January 1st of the year.

Emily (01:37.4)
That’s right. So, so you’ve got a fresh start coming. So you get everything tidied up this at the end of the year and put a neat little bow on it. So everybody thing is ready January 1.

Chris Cooley (01:48.11)
Yeah, yeah. So let’s talk. We’ve got several different, what we want to do is hit on several different topics or tasks, if you will. And so maybe, you know, one of the most common ones that we run into are the employee handbooks. You know, why it’s so important to make sure we update those at least annually.

Emily (02:09.674)
Yeah, absolutely. In a lot of states, changes come and they’ll sometimes they go into effect in the fall, but the majority of changes will go into effect at January one. So the handbook needs to be updated in the fall to reflect what’s coming in January. And you might be looking at things, some really important legal updates. So.

local state, sometimes even federal laws. You know, this year we had some pretty big federal laws that changed that should be reflected in the handbook. And then another thing that, so another thing that companies should look at is any of their own organizational policies that they might have changed throughout the year, things that they’re looking to tweak a little bit, having that set and ready to go to for all new hires and then for everyone on

beginning at the beginning of the year would be ideal.

Chris Cooley (03:08.55)
Yeah, and that’s a good point because it’s not just the regulatory, but oftentimes companies will have memos, things like that. They go out throughout the year that maybe tweak policies, those kinds of things to get those into the handbook and get them codified, if you will.

Emily (03:26.848)
Yeah, yeah, get everybody’s signature, get everything signed off for everybody. And then then back to, you know, the the actual laws. So you might have sick leave laws that have updated throughout the year or family medical leave, things like that that go into effect in different states and even jurisdictions sometimes. And they’ll need to to get those really, really written in and distributed for everybody.

Chris Cooley (03:57.38)
Yeah, and you know now with the it’s it seems like you know again, I say this every podcast I think but you know back in the back in years ago a few years ago, if you were good with federal you were pretty good outside of a couple states. But now it seems like to your point you got to you got to make sure you’re looking for those federal addendums that the federal regulations the state and the municipal. And I know you know it is so common for us to get a phone call.

Emily (04:22.231)
Mm -hmm.

Chris Cooley (04:27.196)
and say I haven’t updated my handbook since 2019.

Emily (04:33.201)
That’s right. That’s right. Five years, I think, is really common for what we see.

Chris Cooley (04:37.764)
Yeah, yeah, and I really do think it needs to be at least annually to make sure that you’re staying abreast.

Emily (04:41.557)
Absolutely.

Well, and then it should be annually, but you know, there have been some other things that have really come across this year that haven’t before. One of the things I was recently thinking about was putting an AI policy in employee handbooks. And this is the first time we’ve ever really had to think about that. But companies need to be, they have a vested interest in deciding how

their employees are allowed to use AI and what they’re allowed to do with it essentially for their particular business model. And that’s a wonderful thing to put into a handbook policy.

Chris Cooley (05:25.52)
Yeah, no, and that’s a great point because, yeah, because depending on what they’re doing, to your point, if it’s technical, you probably don’t wanna use AI. But there may be other things like marketing and things like that where it makes more sense. So yeah, no, that’s a great point. And I guess they almost need to do that down to the position level, depending upon what they do.

Emily (05:34.84)
That’s right.

Emily (05:51.766)
Yeah, that’s true. so that could actually be written into the policy, you know, see your supervisor for, for exact specifications for your position. But, but anyway, at least, at least making a company statement on something like that. And, and that’s just, I guess that’s just the thing that’s in the zeitgeist this year, you know, that we’re really thinking about. So anyway, that’s just something that could go in.

Chris Cooley (06:07.867)
Yeah.

Chris Cooley (06:16.72)
Yeah, no, that’s a great point. And so, you know, so we have the employee handbooks, which are obviously really important to update and to your point to kind of redistribute, refresh those signatures, those kinds of things. Another thing that we really need to look at too are just employment records and documentation and those kinds of things and making sure that you’ve got what you need. I know we…

Emily (06:37.121)
Mm -hmm.

Chris Cooley (06:43.228)
I talk to a lot of different companies and you do too, but a lot of times there’s a lot of turnover in HR. And I know, I think on one of our last podcasts, we talked about the hardship that a lot of these HR departments are going through. There’s a lot of turnover, those things. And so what we find is the number of times I’ve heard, well, I’m doing it, the person before me did.

Emily (07:10.252)
That’s right.

Chris Cooley (07:11.618)
And so just going back through everything and making sure that, you know, everything, not just what from their position forward, but everything is up today.

Emily (07:21.08)
Yeah, I think we recently had a client that they’re a newish client with us and it is that situation. They have somebody new in their HR department and we began discussing I -9s and she said in particular, she’s like, I don’t know that these have ever been done properly. I know what I’m supposed to be doing, but I don’t think it was done before. And so we went through, you know, how she could go back and you know, that she would still have to have

accurate I -9s for all of her employees, even though they’ve been working with her for years. And some things might have changed from one I -9 to another. Maybe someone has a new driver’s license. And when things like a driver’s license are updated, the employee technically should be updating their I -9. It’s a different identification marker, authorization form, essentially. And so many, so many…

I nines are a thing that are easy to consider out of sight, out of mind. You know, they go into their own little file folder, they’re set away. You only really look at them when you hire somebody new and then you just stick that new one in there. And so it’s, important to consider them and then maybe go through the I nine seat and even maybe you can reduce your storage capacity. You can pull out some old ones that need to be tossed, need to be shredded rather, not just tossed.

Chris Cooley (08:45.2)
Hahaha!

Emily (08:46.116)
and make some more space for what you currently have, things like that.

Chris Cooley (08:51.654)
So when can they get rid of an I-9?

Emily (08:55.24)
An I -9 can be destroyed either the later of one year after the employee’s termination date or three years after their date of hire. So whichever is longer for an employee that’s no longer with the company. So of course, anyone that is still actively employed, their accurate I -9 needs to be on file.

Chris Cooley (09:20.028)
And that is a good policy only because if you’re ever audited for whatever reason and they come in and audit you, if you have I -9s that theoretically should have been destroyed and they’re still there and they’re done incorrectly, they’re part of the penalty pool. So that’s important.

Emily (09:34.018)
Mm

Emily (09:39.284)
That’s right. That’s right. And you could have completely avoided that if they were just destroyed when they should have been.

Chris Cooley (09:48.284)
That’s right. And the penalties for that is they vary, right? Depending on if it’s just a simple administrative error all the way through to I’m hiring this person. I know they’re not authorized to work in the US. So they vary. But it’s around $281 to roughly $2 ,800 per form. So it can add up. So if you’ve got 50 employees and you’re not doing I -9s correctly, it can be fairly significant.

Emily (10:17.964)
Yeah, especially, I mean, if you’re a company that has a lot of turnover and you have hundreds of forms for employees that only worked for the company for three days or something crazy like that, that could be really, really huge.

Chris Cooley (10:31.003)
And then, and then to even piggyback that, E -verify where it’s required.

Emily (10:35.264)
Yeah. Yeah.

Chris Cooley (10:39.438)
So it okay

Emily (10:39.574)
Yeah, don’t know. gonna say, don’t actually know what the penalties are there, but yeah, if you don’t have the E -Verify records to show that they were authorized to work, that would be, I’m sure, another huge penalty.

Chris Cooley (10:53.924)
Yeah, and it really varies by state. And so it could be so many dollars per employee that’s not be verified. You can lose your business license. You can lose state contracts. It’s, know, again, depending on the state, can be pretty significant. So that’s another thing to just kind of make sure that, you know, that you’ve done that and that you’ve

done that not only from your position forward, for the whole population of active employees.

Emily (11:32.438)
Another thing, I think, since we’re speaking of like files, I think it’s important for companies to go through and really clean up personnel files as well. Make sure that those are being stored accurately. You want to take a look at who has access to a personnel file versus, you know, managers should not be necessarily seeing the medical files of an employee. So you want to be sure that you don’t have

Chris Cooley (11:37.233)
Mm -hmm.

Emily (12:02.38)
doctor’s notes or FMLA requests or anything like that in personnel files. They need to be stored separately in a separate medical file. to that medical file, managers and supervisors shouldn’t have access. So it should only be the person who is essentially HR, whether that’s an actual HR person or a benefits person or an office administrator even, they should be the only person that has access to a medical file.

But all of those things just really need to be organized and kept separate.

Chris Cooley (12:33.828)
Okay, yeah, and so I guess for I guess if it’s electronic, they just need to make sure that there are different authorizations or whatever that may be to where those supervisors can’t get in that and I that can get tricky with like some HRAS systems because

Emily (12:49.176)
I’m sure it does. But yeah, there needs to be different levels of authorization or different access codes. However, that works for your company.

Chris Cooley (12:57.05)
Yeah, okay. Now another question I get a lot, especially toward the beginning of the year, W -4s. Do I have to go in and update W -4s every year?

Emily (13:10.432)
And the answer is no. No, absolutely not. What does need to be updated is you need to make sure your payroll records are accurate. So say you have an employee that has relocated, they’ve moved across town this year, you need to make sure that that’s accurately reflected in payroll. And then when it comes tax time, then you’ll need to be sure that their tax records are going to the right place.

Chris Cooley (13:12.326)
Good.

Chris Cooley (13:41.028)
Right, yeah, and I guess too from a tax perspective, I know a lot of states have taxation from a payroll perspective for different counties, cities, and so I guess to your point, if they’re moving, they really need to make sure they stay on top of that so that they can make sure they’re remitting those taxes appropriately.

Emily (14:00.768)
Yep. And then of course, if there have been any pay changes throughout the year, you need to make sure that those are accurately reflected within those personnel files or those payroll files to show new pay rates, whether an employee has changed status from full -time or from part -time to full -time or from non -exempt to exempt. Everything needs to be accurately documented and reflected within those personnel files.

Chris Cooley (14:26.848)
Yeah, so it’s just a good idea to just kind of go through and do a Wholesale review it sounds like Okay Another thing that happens a lot Toward the end of the year now some people may may do it on a on a off calendar year But one thing that’s really common are open enrollments

Emily (14:32.31)
I think so. Yeah.

Emily (14:49.238)
Yeah, HR’s favorite time of year is open enrollment time. They love it. No, go ahead.

Chris Cooley (14:50.278)
So what do we need to think about? Yeah.

Chris Cooley (14:56.186)
So yeah, no, I was gonna say, so what do we need to think about for open enrollment?

Emily (15:01.868)
You know, I think there are a couple of things. We actually can go back to those personnel files, the employee records, your benefits person, you’re getting all of that benefits information pulled in and in one place, but then how are you going to distribute it to the employees? So my first recommendation would be to make sure that we have all of the correct email addresses. So if you’re going to use a technical system, a technology system rather.

Chris Cooley (15:19.324)
Mm

Emily (15:31.16)
to administer your open enrollment, how are the employees getting access to that? Are there email addresses where links need to be sent or where documents need to be sent to the employees? Do they all have logins? So is everyone able to access the system before you can even think about putting the information into that system or however else it would be distributed? You need to make sure the employees know

when and where they need to be, if there’s going to be a big meeting to explain all of the new benefits. So that’s the first organizational piece to it. And then you get to thinking about whatever benefit changes are coming that year and how those changes will be explained to the employees and make sure everything is clear and concise and easily understood.

Chris Cooley (16:24.105)
And one thing too is, you know, having those support services specifically if you have a, if you’re using like a Benadmint system, like an employee navigator or something like that, is making sure that, you know, a lot of people can’t, there are people that aren’t computer literate. And so it’s making sure you have those support systems for them to help them if you’re going to use those systems to go in and do that as well.

Emily (16:41.976)
That’s right.

Emily (16:52.2)
It’s important to know the capabilities of your entire employee population and the comfort levels. making sure just like you said, there’s someone to support them through it or they have alternate methods. And maybe that alternate method is a good old fashioned piece of paper and it needs to get entered into the system separately, but you know, it’s part of it. It’s fun for everybody.

Chris Cooley (17:04.849)
Yeah.

Chris Cooley (17:15.888)
Yeah, yeah, that’s right. That’s right. And sometimes you just can’t beat a good piece of paper.

Emily (17:22.434)
True, I have heard that. I’ve heard it.

Chris Cooley (17:25.148)
So now and I guess another thing we need to think they need to think about too is especially if they’re offering things like life insurance those things to make sure that we have updated salaries. We talked about updating the personnel file but they also need to make sure that they have those updated salaries for those life insurance policies and so.

Emily (17:36.066)
That’s right.

Emily (17:45.728)
Yeah, and again, we’re right back to updating personnel files with addresses. So especially if you’re moving to a new benefits, a new insurance carrier, new insurance cards are going to have to be mailed to your employees. So when you’re collecting all of the information, updated addresses, updated email addresses, those things are really, really important as part of the open enrollment process.

Chris Cooley (18:13.413)
One thing I would suggest too is, and I think a lot of employers may not realize this, but there are certain notifications that you have to provide or notices to these employees as part of this whole process as well. So for instance, if you have to provide COBRA, you have to provide a general COBRA notice. Basically, it’s just letting them know that, hey, you…

Emily (18:28.225)
Mm -hmm.

Chris Cooley (18:39.8)
if an event occurs, you can have access to COBRA. And so I don’t know, a lot of times I think they don’t know and or they anticipate their brokers already taking care of that. So one thing I would do as well is if you’re working with your brokers is to make sure that they are providing as part of that enrollment process, all of those model notices that are required because that doesn’t happen all the time.

Emily (19:06.53)
That’s right. And another thing to think about in this area is especially if maybe a company has grown recently and maybe they are now say an FMLA covered employee employer. Some notices for FMLA need to be distributed to employees and if to all employees and if they weren’t distributed during onboarding because maybe the company wasn’t big enough to offer it yet.

But now the company is open enrollment is a great time to distribute those FMLA notices.

Chris Cooley (19:37.804)
That’s a good point. That’s a good point because it’s rare that you have that one good central distribution. And so, no, that’s a great point. So what else on open enrollments? Is there anything else?

Emily (19:44.557)
Mm

Emily (19:54.294)
You know, it’s just so, it’s just has to be so precise. We just, the enrollment specialist professionals just need to make sure that every I is dotted, every T is crossed. They have every signature for every employee. Every employee has made either an election or a waiver for every single benefit offering. And it does get a little bit intense with how specific it has to be, but, and then all of that needs to be reflected in the documentation.

Chris Cooley (20:23.94)
Yeah, no, and that’s a good point because that’s a great segue into our favorite topic, the Affordable Care Act. And so, you know, those waivers come in very handy when you’re dealing with the Affordable Care Act. So that is something that a lot of people, they’ll do those passive enrollments to where they’ll just say, do you want to do you want to change? And if there’s no change, i .e. I didn’t take it last year, I don’t want it this year or I had it last year, I want this year.

They don’t get those documented waivers. So from an ACA perspective, that’s so important.

Emily (20:57.004)
That’s it.

Absolutely. If the IRS ever comes knocking, you need to be able to prove that the employee was offered coverage and actively waived the coverage instead of if you don’t have any sort of documentation, then there’s no way to prove to the IRS that you don’t deserve a penalty.

Chris Cooley (21:20.378)
Yeah, so what is what, so from an Affordable Care Act perspective, what do we need to think about at year end?

Emily (21:29.452)
You’ll need to think about back to the number of employees that you have on payroll. We’ll need to think about whether or not the company is still is becoming an applicable large employer or whether they have been, they still are. So they’ll need to be doing some employee counts to determine how many full -time employees or how many full -time eligible employees they have.

And if they determine that they are an ALE, then they fall under the rules of the Affordable Care Act and will need to make any adjustments necessary for their benefit offerings, for their employee premium, their employee share of the premium and make sure everyone’s covered there.

Chris Cooley (22:17.532)
Yeah, because the number of employers we work with, that we get a phone call that say, I didn’t know I was an ALE in 2020, 2019, is we get those every week. And so we’re doing back reporting for those guys for those periods. And so that is, that’s so important from that ALE calculation to make sure, because the way that works, a lot of people don’t…

A lot of people don’t understand that the ALE calculation, you look at the prior year to determine if you have to comply in the next year or in this coming year. So you do the calculation for 2024 to figure out if you have to comply in 2025. A lot of people think once you hit 50 in a given year, you have to comply in that year.

Emily (22:58.956)
That’s right.

Emily (23:12.64)
Right. And yeah, that’s not the case. It is the following year. And then if maybe you’ve already made some determinations on what the employee portion of the premiums would be, but you didn’t realize you were in ALE, you’re going to have to recalculate those premiums and make sure that the employee portion is affordable.

Chris Cooley (23:28.419)
Mm -hmm.

Chris Cooley (23:32.316)
That’s right. And so what if I don’t do that? So what are my potential penalties?

Emily (23:41.12)
So there are two different penalties. There’s penalty A, and sometimes I have to look at these. I’ll have to look at these pretty specific. Penalty A happens if an employee was not offered coverage. And I hate that I have to go back and look at these every single year, but I do.

Chris Cooley (23:50.981)
haha

Yeah.

Chris Cooley (24:12.486)
We can cut this. You wanna start, you wanna, yeah, yeah. So, yeah, it’s, they don’t offer MET coverage, they get penalty A, yeah. And then penalty B is the minimum value and affordability.

Emily (24:12.534)
So, okay, so.

Emily (24:26.392)
95%. Yeah.

Chris Cooley (24:36.124)
So we can.

Emily (24:36.797)
I can never just keep this in my brain. So maybe we just don’t ask me that question.

Chris Cooley (24:40.174)
Okay, no, that’s fine. That’s fine. So what do we what if we you want to go maybe we can just go back? I’m trying to think where we could start.

Chris Cooley (24:53.148)
Tell you what, I’ll just say, I’ll just say, these are, I’ll just say, well, we know there can be significant penalties for ACA. And then I’ll just say the 2970 and the 4460. Okay.

Chris Cooley (25:11.632)
Well, one thing we know too is that if you don’t comply with the Affordable Care Act, so really there’s two things to look at. is are you offering who and what you should? And two is are you doing your reporting? So if you don’t offer insurance, at least what they term MEC insurance, then you get penalty A.

Emily (25:25.496)
Mm

Chris Cooley (25:39.996)
and penalty A is 20 it varies by year but for 2024 it was $2 ,970 per eligible employee but you get your first 30 for free right so that’s kind of how that works and then penalty B is if you offer if you don’t offer minimum value and then you don’t offer it affordably

Emily (25:53.131)
Okay.

Emily (25:56.779)
Okay.

Chris Cooley (26:08.092)
you get penalty B and the cost there is $4 ,460 per employee that goes to the exchange.

Emily (26:17.514)
Okay, yeah. So that could because the IRS knows, of course, as soon as someone goes and tries to purchase from the exchange.

Chris Cooley (26:19.12)
So.

Chris Cooley (26:26.044)
Yeah, so they triangulate really what happens is is the And this confuses people to the carrier has to send a 1095 and 1094 form So they’re required to do that and we’re assuming all this is fully insured insurance The company has to send if they’re a le’s a 1095 and 1094 form And then you have the exchange that reports who’s going to the exchange. So they kind of try to triangulate all that

And that’s where they come up with these letters. But to say that, there could be significant penalties if you’re not doing this. And the question I always get is, are they really going to penalize me? And so I always say, I can’t answer that question because it varies. know early on, like back in 19 and 20, they were pretty lenient, right?

Emily (27:14.104)
That’s right.

Chris Cooley (27:22.332)
But as we go, we’re almost 10 years into this, to claim ignorance is getting kind of difficult. And so I don’t know that they forgive as much as they used to.

Emily (27:29.676)
Mm -hmm.

Emily (27:34.689)
That’s right. And honestly, you won’t know until you get the letter. And so, and then you have to be prepared for big fines if it hasn’t been done for years.

Chris Cooley (27:38.278)
That’s right, that’s exactly right.

Chris Cooley (27:44.538)
Yep. And these letters, what we found is some of them are two years after the fact, three years after the fact. So I talk to people all the time that go, didn’t report, I don’t have to, they haven’t penalized me. And then a year later, here we go.

Emily (27:59.744)
Well, of course, it’s, it is the federal government. So, you know, things sort of move at a snail’s pace, but then when they want their money, that’s going to need to happen quickly. That does not happen at a snail’s pace.

Chris Cooley (28:11.6)
That’s exactly right.

So that’s why it’s so important to figure out if you’re an ALE and there’s penalties. And then on top of that, we have the reporting.

So it’s really important that if you are an ALE, well we’ll talk about it, there’s a couple different times you have to report, but if you’re an ALE that you do that reporting, the 1095 and 1094 form.

right. And so, and so, because I know the penalties on that, one thing that I tell people as well is, a lot of times people will be late and then the thought is, yeah, I’m late. I’ll get them whenever. What they don’t realize is there’s penalties, obviously for filing late, but those are graduated. And so,

Emily (28:45.27)
No, no, no.

Emily (29:02.722)
Right.

Emily (29:10.2)
Yeah, so you there’s a little bit of a small grace period, right? Where where if you file between these dates, it’s not as much so. And I think if it’s just if it’s less than 30 days late, it’s not as big of a penalty as it is if you file within the next six months, right?

Chris Cooley (29:13.883)
That’s right.

Chris Cooley (29:26.428)
That’s right. So, so in that if you’re if you do it like under 30 days, the penalty is only $60 a form. And so one thing to say there too is that you have an employer has to send two forms per employee. They have to send one to the IRS with the 1094 form and the 1095 forms. And then they have to send a 1095 form to the employee.

Emily (29:43.266)
Mm

Chris Cooley (29:53.404)
So really that $60 is $120 if you don’t give them to the IRS and the employee. if it’s less than 30 days late, it’s $60. If it’s 31 days to August 1st, it’s $130 per form. So $260 in total. If it’s after August 1st, it’s $310 per form. So it’s $620 in total.

That’s the reason I always really say, look, just because you’re a day or two late, let’s not put this thing off because your penalty is going to just keep growing.

Emily (30:31.434)
And the filing deadline, though, is typically March 1st, right? I know it changes a day or two every year, but it’s around that March 1st time frame. OK.

Chris Cooley (30:43.782)
So it’s really important to do that because, but if you’re after March 1st, you’re kind of hosed either way, right? But you wanna get them done before then.

Emily (30:53.76)
Yeah, so you’re not as host.

Chris Cooley (30:55.612)
That’s right. That’s right. In one thing, so your large groups, we know we have to file, right? Whether you’re fully insured or self -insured. But one thing that really popped its head up last year that a lot of people didn’t realize is small groups that are self -funded now have to e -file starting beginning of 2024.

Emily (31:04.875)
Mm.

Emily (31:19.436)
That’s the one.

So before 2024, they could mail paper forms to the government, right?

Chris Cooley (31:28.764)
That’s right. So if they had under 250 forms, you could just mail them in. So that’s what everybody did. That’s what a lot of these small groups did. But in beginning January of 2024, you had to start e -filing them. And so I talked to so many people that didn’t realize that. So they mailed them in and then had to turn around and e -file them. Or I actually had clients go,

I’m not e -filing, I’m gonna mail them and it’s their problem.

Emily (32:00.482)
That’s right. They can handle it. They’ve got somebody checking that mail.

Chris Cooley (32:03.65)
I’m sure they’ll be real lenient with that.

Emily (32:05.942)
Yeah, and the e -file process isn’t just a matter of the employer logging onto a website and just sending an upload, right? It’s a lot more detailed than that.

Chris Cooley (32:15.868)
Absolutely. And so that we, I know we helped a lot of clients with that last year in helping them with that filing. And now what I will say is that’s only for groups under 50 that are self -insured. And what gets people is there’s a product, an insurance product that’s extremely popular with small groups and it’s term level funded. And so they, people always hear level funded. Well, that is a self -funded product.

Emily (32:30.449)
Mm

Chris Cooley (32:47.011)
And so if you’re on a level funded plan, talk to your broker, they should be able to tell you, but then you fall into that group that has to do that filing.

Emily (32:57.15)
And I know some brokers will assist with that filing, but not all. So that’s a thing that we do in that case.

Chris Cooley (33:04.38)
Yeah, that’s right. The other thing that we found too, where there was some confusion, is a lot of clients thought their carriers were doing it. What they did was they would provide the 1095 form. So they would give them the 1095 form and the assumption is, the carrier did the filing with the IRS, but they weren’t doing the e -file for them. They were only providing the 1095 form.

Emily (33:30.36)
So they have to take the information that’s on the 1095 and then submit the e -file based on that information.

Chris Cooley (33:36.036)
Yeah, absolutely. So that’s important. So there’s a lot there and that’s just the high end of the ACA, but I would definitely, to your point, make sure if you’re an ALA and then make sure if you have to report, you’re getting that done timely.

Emily (33:53.92)
Absolutely.

Chris Cooley (33:56.124)
I think another thing we wanted to talk about was background checks.

So what do we need to think about for background check?

Emily (34:05.911)
Well,

I guess you want to make sure that you have whatever the most current process is that, that employers are utilizing for their own background checks. I think you need to look at that and look at again, back to your state and local laws and make sure that you’re not checking for, checking for things or within timeframes that are banned by the state and local laws. ban the box campaigns have become really popular all over the country.

You know, it’s not just in California anymore. so knowing what the regulations state for your specific jurisdiction and making sure that your, the current background screenings that you’re performing are in line with those, with those regulations.

Chris Cooley (34:52.602)
Yeah, no, I agree. And also that your authorization forms comply with the state and municipal. You know, that’s so important because to your point, they change so much. It may be that you need special verbiage in your authorization forms. Now, if you’re using a good CRA, a good background check company, they should be keeping all that up to date for you. But I do think that’s something they need to

need to look at. know that we do that. We have those reviewed. And so that’s one thing to really, really think about. Because I know the penalty, I always go back to dollars. I’m gonna count it. So, you know, the penalties are if you blow an FCRA rule, so you’re violating it, it could be up to $1 ,000 per violation. And that doesn’t even include lawsuits.

Emily (35:47.551)
my goodness. sometimes, you know, sometimes it happens that an employment law or something along those lines changes without a lot of fanfare. And so there’s the state isn’t necessarily going to send an email to every single employer and say, remember, remember this year you have to change everything. Pay attention to that.

Chris Cooley (35:49.312)
Chris Cooley (35:59.036)
Mm

Chris Cooley (36:09.114)
Yep, that’s right. That’s exactly right. Especially in that, know, because a lot of people don’t think of just aren’t thinking about background checks that way as they are like a lead for something. You know, the other thing that I would suggest, you know, for groups is checking your background check package. Do you have new positions? Do you have, you know, is what is what you’re ordering?

Emily (36:20.172)
Mm -hmm.

Chris Cooley (36:36.662)
really covering you for what that employee’s doing. So in a prior life, before we did background checks, I knew nothing about background checks, right? I didn’t know, I mean, somebody could walk up and say, I’m doing a database search and it’s national. I didn’t know the difference. I didn’t know what that was giving me, but it was national. And so, but as we got in this business and industry, and we’ve been in this business for a long time now,

I understand the differences between these different products. And so what I would suggest is get with your background check provider, talk to them and let them go through, look at your packages that you’re offering or ordering, and then make sure that they can look at those and say, okay, so here’s, so you know exactly what’s being ordered and to make sure that, and they can provide recommendations.

what that should be you know hey for a accountant we we suggest you run this and then they can make a decision if they want to do that or not but I think that’s one one big thing as well.

Emily (37:48.6)
Yeah, that seems like one of the things that probably doesn’t become top of mind to most business owners.

Chris Cooley (37:56.721)
Yeah, because background checks are set it and forget it. You check the box and just press order, right? But that’s so important. And so the other thing that I would suggest to groups, one thing that we run across on the screening side a lot is if you’re not gonna hire somebody because of a background check,

Emily (38:00.012)
Mm -hmm.

Chris Cooley (38:24.164)
Make sure that you go through the pre adverse and adverse action process. Review what you’re doing when you’re not hiring someone because those you have those laws and those laws to your point earlier can change not only based on state but by municipality by county and those things. So just make sure that if you’re not hiring someone you have a predefined process.

which you’re doing that and that’s required under the FCRA. And again, there are some state municipal and county levels, but just to make sure that you stay compliant, because if you’re not, that can be a risk area for you.

Emily (39:05.225)
Absolutely.

Chris Cooley (39:08.38)
I think the last thing we were going to talk about for today are labor posters.

Emily (39:14.55)
Yeah, you need to make sure those are updated every year too. There might have been, so especially this year, you know, there was that big Department of Labor salary change. So you want to make sure all of your Department of Labor updates, everything is current on your labor poster that’s displayed in a highly visible place for all employees to be able to see it. And you want to make sure it’s not old, you know.

Again, it’s a set it and forget it thing. So many people get that labor poster the first time it says it has their EEOC. It has everything on it and and then they don’t consider the fact that so that laws change so frequently.

Chris Cooley (39:56.636)
Yeah, and it can be big penalties. If you wrap, you you get the big poster and it’s got 15 notices, whatever it is, there’s different penalties for each notice if you’re not providing them. And so I think if you wrap them all up, you know, it’s an worth of $25 ,000, the penalties. So it can be pretty, I mean, it can be very significant.

Emily (40:10.999)
Uma.

Emily (40:24.385)
That’s incredibly significant. And so how would a group get find that? So who’s going to know that their posters are not updated?

Chris Cooley (40:36.25)
Well, generally what we see and what we’ve seen working with different clients is you don’t have the labor poster police that knock on the back door and they’re walking into your building and trying to look for them. You know, they don’t have these teams of people doing that. But what we found is maybe you have some type of complaint. It could be a harassment complaint. It could be a discrimination complaint, whatever that may be. And so at that point,

the Department of Labor or whatever organization comes into your building and one of the first things they’re gonna ask is where’s your labor poster? Right, so now we’ve kind of opened, yeah, so now we’ve kind of opened Pandora’s box because we have this complaint and they’re coming in and going what else is going on?

Emily (41:16.052)
It’s in the break room.

Emily (41:26.466)
Let’s see your personnel files, everything. Like it opens you, it’s so much exposure when there’s any type of complaint, there are exposures in so many different areas that need to be looked at.

Chris Cooley (41:29.164)
Exactly right.

Chris Cooley (41:40.028)
We worked with a group that was a franchise and they had, I don’t know, eight, nine locations, 10 locations, whatever it was. And they had one complaint at one location. And I don’t remember what it was. And when they came in, they started looking at I9.

And then what they did was they said, I want every I -9 for every employee in every store. And these were franchisees. These weren’t even, if I remember right, these weren’t even company stores, that they want to look at everyone. so that, and that’s the way a lot of it works is it’s not necessarily that you’ve got people actively, you know, looking at you as a business. It’s that one whistleblower. It’s that one guy or gal that does the complaint.

And when they get in, then that’s when they come in and they look at this, like labor posters and things like that.

Emily (42:38.144)
And I feel like it could just snowball so, so huge into such a massive thing that started from a tiny thing, but because other things hadn’t been periodically handled and cleaned up, now it’s a huge, massive snowball.

Chris Cooley (42:53.212)
That’s right. And in talking about labor posters, a labor poster is 35 bucks. It’s not like you’re gonna go get a loan at the bank to buy that labor poster. It’s 35 bucks. I mean, don’t go to Starbucks for a couple days. You know?

Emily (43:04.043)
That’s right.

Emily (43:07.576)
That’s right. Sign the things. Submit the order. Let us mail it straight to you.

Chris Cooley (43:14.084)
Yeah, that’s right, that’s right. Order online. You don’t even have to get out of your chair.

Emily (43:21.078)
Yes.

Chris Cooley (43:22.842)
You know? So that is one thing that we do suggest is just making sure you have an updated labor posture.

So what else?

Emily (43:35.659)
You know, that’s all that comes to mind for me right now. We’ve talked about handbooks, benefits, personnel files, which seems like they all sort of intermingle. They all work together. And yeah, it’s just time for that fall cleaning. Time to organize.

Chris Cooley (43:50.266)
Mm -hmm.

Chris Cooley (43:55.548)
Yep, that’s right. And it’s those things to your point earlier that just always kind of blend in the background. It’s just bringing them to the forefront and checking them out.

So, well, awesome. Well, no, well, I appreciate it. It’s always fun when you’re on. So I appreciate you joining me. And yeah, and everybody that listened, we definitely appreciate you joining us today.

Emily (44:11.82)
Yeah, I enjoy it. Thank you. I love it.

Emily (44:21.772)
Thanks.