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PayTech March Newsletter

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Welcome to PayTech’s March Update

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Market Update

WASHINGTON — The IRS said Friday that the number of taxpayers whose tax information may have been stolen by computer hackers now exceeds 700,000 – more than double the agency’s previous estimate.

IRS: Data breach much larger than first thought

The tax collecting agency said 390,000 more taxpayer accounts may have been compromised than the 334,000 it warned about a year and a half ago. The breach was first discovered in May 2015, and the increase first reported by The Wall Street Journal.

The sensitive information can be used for identity theft or to claim fraudulent tax refunds.

The thieves accessed a system called “Get Transcript,” where taxpayers can get tax returns and other filings from previous years. In order to access the information, the thieves cleared a security screen that required knowledge about the taxpayer.

The IRS says it is immediately moving to notify taxpayers, offering identity theft protection services and giving them access to a program that assigns them special ID numbers that they must use to file their tax returns… (read more)

Payroll Update

Top Questions and Answers Asked About the Affordable Care Act (ACA)

Q: Does PPACA require all employees to be tracked or only those not currently meeting the full-time employee threshold?

A: Employers need to offer health insurance coverage to full-time employees and report who was offered health coverage. The IRS definition of full-time is 30 hours or more per week. Employers with variable hour and/or seasonal employees are encouraged to use the Healthcare Measurement tools in UltiPro to identify employees who are eligible for the offer of coverage. You must track the offer of coverage, minimum cost for self-only coverage and safe harbor codes on a monthly basis for each eligible full-time employee for each month of 2015.

Q: Is the minimum cost required to be filled in even if they are not covered?

A: Instructions on the form specify when the minimum cost is required to be filled in; it depends on the code used for offer of coverage.

Q: Do we need to track offer of coverage information for each employee?

A: Yes, you need to track this information for each employee. IRS reporting requires you to include all employees who were offered or should have been offered health insurance coverage.

Q: If an employer chooses to offer benefits to all full-time and part-time staff, does the employer still need to track all the monthly time data for IRS reporting?

A: You need to track which employees are considered full-time based on IRS requirements. For each full-time employee, track the type of offer of coverage (using the associated offer of coverage code) that was made to full time employees for each month during 2015. If you are a self-insured employer and offered part-time staff coverage, complete Part III of Form 1095-C for employees who accepted coverage.

Q: Is it the responsibility of the employer or the insurance company to gather employee and dependents’ social security numbers when submitting the required reports?

A: If you are filing as an employer, you need to gather the employee and dependents information.

Q: Is a non-profit organization that is self-insured subject to reporting?

A: If you have 50 or more full-time or full-time equivalent employees, then, yes, you are subject to reporting.

Q: Our organization gives employees Health & Welfare dollars to pay for coverage and this covers employees’ cost. As an employer, do we enter an amount of $0 for the employee portion?

A: Discuss this with your legal counsel. The IRS, DOL, and HHS have rules around providing your employees with money to purchase health coverage rather than directly providing coverage.

Q: Would we need to track non-employee COBRA participants (ex-source, over-age children)?

A: Yes, if you are self-insured.

Q: If you have union employees covered by a union health plan, must they be reported as well?

A: Employers must offer health coverage to all eligible full-time employees who meet the IRS requirement, regardless of membership in a union.

Q: Will employees be required to auto-enroll new full-time employees in a health plan?

A: The ACA originally required applicable employers to auto enroll new full-time employees in a health coverage plan offered by the employer and to continue enrollment of current employees in an offered health plan. However, this provision never went into effect as regulations for implementation were still being ironed out.

As of November 2015, employers no longer have to worry about the provision requiring auto-enrollment. The Bipartisan Budget Act of 2015 repealed the auto-enrollment mandate.

HR Update

5 Recruiting Trends for 2016

Hiring forecasts for 2016 are bullish, and employers aiming to increase headcount will be tasked with differentiating themselves from the competition in order to win talent.

Experts predict many of the recruiting trends prevalent last year—branding, maximizing talent analytics, repairing the candidate experience and leveraging untapped sources of hire—will continue to resonate in 2016.

“As the employment market continues to tighten, it will become increasingly difficult for employers to find the quality, skilled candidates to meet their needs,” said Joanie Courtney, senior vice president, global market insights at job site Monster. “Attracting and retaining talent will remain a challenge as top candidates experience an increase of competitive job offers, along with better salaries and opportunities.”

Companies will take an even more strategic approach to talent acquisition, “becoming increasingly inventive to attract and retain valuable candidates,” said Byrne Mulrooney, CEO of Futurestep, a Korn Ferry company specializing in recruitment process outsourcing. “While 2015 indicated the start of this thoughtful attitude to hiring, we expect this approach to pay off” this year, he said.

  1. Focus on Employer Branding Will Grow

Quality candidates are in the driver’s seat. And job seekers today are more sophisticated job shoppers, according to experts. “They won’t bother to apply to a company if they can’t find enough information about the company online,” said J.T. O’Donnell, CEO of Careerealism, a career services site based in the Boston area.

“With the evolution of social media and employer-brand-focused sites like Glassdoor, it’s critical that companies focus on establishing and developing their brand in 2016,” said Josh Tolan, CEO of Spark Hire, a video-interviewing company based in the Chicago area. “More and more companies are going to look for ways to showcase why candidates should apply to work there.”

Candidates want to know as much as possible about the job, company, culture and corporate values, said William Tincup, CEO of HR consultancy Tincup & Co., based in Dallas. “Recruiters must be prepared to have robust and honest conversations about every aspect of the job. If you can’t handle this, you’ll lose talent.”

Susan Vitale, chief marketing officer for Matawan, N.J.-based recruitment software provider iCIMS, recommended using actual employees in photos and videos to help illustrate employment brand, in addition to showcasing the company culture, key benefits and training opportunities on a careers site and social media pages. “Employees are a company’s best brand ambassadors and their stories speak volumes more than a company mission statement,” she said.

  1. Use of Talent Analytics Will Increase

Analyzing and curating data to measure and improve hiring will become more prevalent in 2016.

Jennifer McClure, executive coach and CEO of Unbridled Talent, a management consultancy based in Cincinnati, predicts talent acquisition professionals will feel the pressure to move away from traditional recruitment methods dominated by instinct and begin to master the ability of turning everyday data into recruiting intelligence.

“HR and recruiting leaders will continue to seek better ways to get their arms around data and develop true insights about future and current employees,” agreed Leela Srinivasan, chief marketing officer for Lever, an applicant tracking system based in San Francisco.

Many companies are already going beyond simply reviewing basic operational measurements like time-to-fill, cost-per-hire and source-of-hire, and are instead hiring full-time analysts to mine for more in-depth talent metrics, Mulrooney said. Some companies are using data to analyze competitor talent pools to find candidates with the right skills and potential to join the organization, and are examining data on whether full-time or part-time employees bring the highest return on investment. “Companies are using data to capture a whole-person analysis of candidates to determine if they have the competencies, experiences, traits and drivers to succeed,” he added.

Srinivasan noted that “we’re finally getting to the point where people can actually trust and filter the data real-time within their applicant tracking and HRIS [human resource information system] systems and use the data to make decisions about recruiting and managing employees.”

Organizations are also beginning to store data in complex ways, thanks to the cloud, said Steve Lowisz, CEO of Qualigence International, a global recruiting and recruitment research firm based in the Detroit area. “Mass amounts of data can now be analyzed with higher speed, producing quicker results. Recruiters should make it a top priority for 2016 to understand the storing of data and its effect on hiring.”

HR has to analyze talent data, concluded Sarah Brennan, CEO of talent advisory firm Accelir and founder of the HR Tech Blog. “I know this is a scary thing for HR to hear, but for too long HR has gotten a pass on lacking analytics because it’s a ‘people person’ job or the technology to do it wasn’t affordable. In 2016, neither are valid.”

  1. Employers Will Broaden Their Sourcing Scope

Lacking enough qualified candidates, employers are going to have to get creative about hiring, O’Donnell said.

In addition to “a boom of apprenticeships and in-house training programs,” O’Donnell predicts recruiters will look to similar industries to poach talent. And although it may seem counterintuitive, consider cross-industry hiring, Lowisz said. Employers can miss out on quality hires by taking too narrow a view on where they source talent.

“Individuals who have worked in various other fields often gain experience that translates directly to the job in question,” he said. And they may also provide the company with cultural diversity that appeals to new markets, he added.

Experts predict an increased focus on developing talent internally and hiring for traits and motivations, instead of strictly skills and experience. “Sourcing internally has its benefits, from a shorter time to productivity to lower staffing costs, which as a result means better financial performance,” Mulrooney said.

Tolan wholeheartedly recommends developing current employees for new roles; it “keeps them motivated and helps the organization as their knowledge compounds over time, which makes them more valuable the longer they are with the company,” he said. HR will need to have systems for tracking how employees are doing so top performers can easily be identified, he added.

Companies are also increasingly looking beyond just the skills and experience candidates bring to the table, and considering what some call investment or program hiring.

“Companies are hiring people with the right traits and motivations who can be trained on-the-job for professions from software coding to customer service,” Mulrooney said. “More often than in the past, these employers are becoming less adamant about hiring only college graduates and are evaluating people on their ability to perform in the future.”

Hiring criteria will have to fundamentally change, O’Donnell said. From the big three criteria most often used to hire new talent—personality, aptitude and experience—it’s experience that has the most wriggle room, she said. “You’re not going to change a person’s personality or aptitude for a job, but as long as you can identify a cultural fit, you can train a candidate to do the job.”

  1. HR Will Look to Repair the Candidate Experience

Organizations are reviewing their recruitment processes to ensure candidates can easily find and apply for open positions. Failing to keep in touch with candidates after making initial contact, a lengthy and tedious application process, and lack of engagement from recruiters during the hiring process “leave the candidate feeling unappreciated and disrespected,” Lowisz said.

More employers are measuring candidate experience as a form of recruiter and business performance, said Elaine Orler, CEO and founder of talent acquisition consultancy Talent Function, based in San Diego.

“Every single candidate touch point—the online application experience, each interaction with the scheduler, the preparedness of the interviewers, the turnaround time in communicating with candidates, the way an offer is delivered—reflects on the employer, Srinivasan said. “If you’re missing the mark, the world soon knows about it due to sites like Glassdoor, and highly skilled people juggling competing offers will certainly factor their experience as a candidate into their final decision, so it impacts offer acceptance rates,” she said.

In 2016, candidates will drive the frequency and medium of communication, Tincup said. “They expect text messages and regular status updates. If you can’t do that, or worse, won’t do it, you’ve already shown yourself as someone who’s slow to the game.” They also want actionable feedback, he said. “If a candidate doesn’t get a job, offer four ways he or she can improve and potentially land this job the next time [it’s open].”

Improving the rejection process should be a priority. “How you choose to let somebody down says a lot about you as a company,” O’Donnell said.

She recommended coming up with a more-helpful rejection letter that thanks the applicant for applying, offers free job search resources and serves to cultivate future talent pools. “That’s better than not hearing anything, or getting a cold form letter.”

Orler said that treating rejected candidates fairly creates the opportunity for those candidates to provide referrals for other candidates, easing the burden for recruiters.

Send tailored, relevant communications about new job opportunities and other news about the organization, Vitale said. “This will help sourcers build a pipeline of engaged candidates for future openings.”

Mulrooney said that 2016 will see more personalized candidate concierge services. “Recruiters will be expected to deliver the white-glove treatment for candidates. Giving special tours of other departments within the company, developing presentations on the company culture and providing lunch between interviews will be de rigueur.”

  1. HR Technologies Will Continue to Integrate (Slowly)

Experts predict that HR technology consolidation and cross-platform expansion will continue this year, but at a slow, incremental pace, as talent acquisition technology shifts into new areas.

“HR technology will become more streamlined as clients turn from multiple vendors to bundling their human capital management, applicant tracking systems and video interviewing, all on one platform,” Mulrooney said.

Integration is not happening as quickly as had been forecast in years past. “While the HR technology vendors are working on this, it isn’t advancing as quickly as I would have liked to see four to five years ago when the road maps were being talked about,” Brennan said. “What we find instead is a few talent acquisition suites starting to take hold, and even most of them use partners to achieve this vs. being a true all-in-one platform.”

Brennan said she’s seen more of the traditional talent management platforms starting to expand and enhance their recruiting solutions, but the smaller “bolt-on solutions outside of ATS/CRM [applicant tracking system/candidate relationship management]” will be slower to come. “If you’re a CHRO or VP of HR that truly wants to find a system that excels in all the various recruiting-related products and has talent management as well as HRIS-type functions, you’ll have better luck winning the Powerball lottery.”

And that might be OK, because the technology to achieve a truly integrated and effective all-purpose suite may not be there yet. “The number of vendors you work with is far less critical than having technology that integrates, and integrates seamlessly,” Srinivasan said. “In fact, relying on one vendor to do it all can be much less effective because no one player is best-of-breed at everything, and you can end up with ill-thought-out software that poorly supports critical workflows and processes.”

Brennan agreed, saying that “the problem with being an all-in-one suite is that while you are strong in one or two areas, the other areas are often average or even substandard versions of the point solutions.”

Orler stressed that while the market continues to shift, the most important consideration for organizations looking for technology solutions is to ensure they are clear about what they need and why.

Accounting Update

Inflated Refund Claims Again Made the IRS “Dirty Dozen” List of Tax Scams for the 2016 Filing Season

The Internal Revenue Service today warned taxpayers to be on the lookout for unscrupulous tax return preparers pushing inflated tax refund claims. This scam remains on the annual list of tax scams known as the “Dirty Dozen” for the 2016 filing season.

“Be wary of tax preparers that tout outlandish refunds based on federal benefits or tax credits you’ve never heard of or weren’t eligible to claim in the past,” said IRS Commissioner John Koskinen. “Taxpayers should choose preparers who file accurate returns.”

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter any time but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

Don’t Fall Victim to Promises of Outlandish Refunds

Scam artists routinely pose as tax preparers during tax time, luring victims in by promising large federal tax refunds or refunds that people never dreamed they were due in the first place.

Scam artists use flyers, advertisements, phony store fronts and even word of mouth to throw out a wide net for victims. They may even spread the word through community groups or churches where trust is high. Scammers frequently prey on people who do not have a filing requirement, such as low-income individuals or the elderly. They also prey on non-English speakers, who may or may not have a filing requirement.

Scammers build false hope by duping people into making claims for fictitious rebates, benefits or tax credits. They charge good money for very bad advice. Or worse, they file a false return in a person’s name and that person never knows that a refund was paid.

Scam artists also victimize people with a filing requirement and due a refund by promising inflated refunds based on fictitious Social Security benefits and false claims for education credits, the Earned Income Tax Credit (EITC), or the American Opportunity Tax Credit, among others.

The IRS sometimes hears about scams from victims complaining about losing their federal benefits, such as Social Security benefits, certain veteran’s benefits or low-income housing benefits. The loss of benefits was the result of false claims being filed with the IRS that provided false income amounts.

While honest tax preparers provide their customers a copy of the tax return they’ve prepared, victims of scams frequently are not given a copy of what was filed. Victims also report that the fraudulent refund is deposited into the scammer’s bank account. The scammers deduct a large “fee” before paying victims, a practice not used by legitimate tax preparers.The IRS reminds all taxpayers that they are legally responsible for what’s on their returns even if it was prepared by someone else. Taxpayers who buy into such schemes can end up being penalized for filing false claims or receiving fraudulent refunds.

Taxpayers can help protect themselves by doing a little homework before picking preparers who make refund claims that may sound too good to be true.

Start with the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help taxpayers find a tax return preparer with the right qualifications.

The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:

  • Attorneys
  • CPAs
  • Enrolled Agents
  • Enrolled Retirement Plan Agents
  • Enrolled Actuaries
  • Annual Filing Season Program participants

Also check the preparer’s history.  Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory.


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