How many businesses hate QuackBooks?

It used to be fun and easy to use about ten years ago. Now, it comes with an annual check up from a Quickbooks Pro-Advisor to unscramble what you did during the last fiscal year. Fun huh?

By taking control of your payroll and quarterly tax reporting using our tax saving programs, you can sleep better knowing you are in compliance. It’s free if you can figure out how to use it, but we do have help desk and training videos. If you want us to do the calc’s, let us know.

Find us at www.waveapp.com & www.wkrcomp.com/home and find how much in taxes you can save!

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Why Should Your Business Use CONC, an Independent Contractor compliance program?

Because it is SIMPLE, QUICK & ACCURATE!.

Every time you post a contractor for your Contractor Summary Report this insures they are independent and not employees.

 Who Should Use CONC?

▪Businesses who hire independent contractors.

▪Businesses who have 1 or more risk classifications.

This program encompasses all the current laws, rules, regulations, and penalties to track independent contractors to prevent audits that can jeopardize your business.

These reports can be sent to bookkeepers and accountants for payroll data entry and quarterly reporting, and transmitted via the internet from your very own website via a login and password secured program.

No more faxing, transcribed, or call-in errors. Compliance procedures are built into the program to decrease fraudulent payroll and independent contractor practices.

Sign up for a risk free guarantee to see how you can easily create payroll data entry and keep track of contractors for record keeping compliance.

More information on CONC, go to WKRComp.com/home 

CONC FAQ’s   –    CONC User Manual/Support   –    CONC Benefits

Ever read your risk classification job descriptions to save premium dollars?

 

By using our free compliance programs, companies can apply multiple work/risk classifications to every employee and thus avoid paying the highest premiums for every employee hour. For example: A berry farm in Port Angeles expanded their operations to cut hay. After the audit, it was fined $14,000 for the highest-ranking risk classification for not having the right classification assigned. All they had to do was apply for a new risk classification, which was the same rate as their “berry operation” class.

A small building contractor had a fabrication and storage yard. He had his employees work there to keep them busy during slow times. But since he did not know about this risk classification, he paid for a machine operator risk class at $11 pre hour vs. the yard class of $2.80 per hour. The criterion for this type of operation was that the storage yard worker had to work in the yard for 8 hours to qualify. By scheduling work ahead of time, the business owner could save the daily premiums amounting to $262 per month having the employee work one day each week, thus saving $3,148 per year.

There are specific risk classifications for 23 different industries in Washington State. Each classification has qualifying Administrative Codes with corresponding granular hourly exemptions available to any business if they knew they existed. Our compliance programs can provide these small businesses with instructions on how to best apply classification codes.

Granular Payments or WC Premiums

Why pay for a prevailing wage program when it is free to small companies having to file Certified Payrolls (CPRs)

 Why Should Your Business Use Our PRJC Compliance Program?

▪SIMPLE, QUICK & ACCURATE!.

We have taken the fear out of bidding prevailing wage jobs. You can track multiple projects with classifications using your employees and hiring subcontractors, too.

 Who Should Use PRJC?

  • Businesses who do more than one project at a time.
  • Businesses who have multiple job sites.
  • Businesses who work in more than one classification.
  • Businesses that have same employee working in different states

This program encompasses all the current laws, rules, regulations, and penalties to track employees to prevent audits that can jeopardize your business.

These reports can be sent to bookkeepers and accountants for payroll data entry, quarterly reporting, and transmitted via the internet from your very own website via a login and password.

Compliance procedures are built into the program to decrease fraudulent payroll and independent contractor practices.

Sign up for a risk free 30-day money back guarantee to see how you can easily create payroll data entry and keep track of employees and contractors for record keeping compliance.

More information on PRJC, go to http://www.WKRComp.com/home

PRJC FAQ’s    –    PRJC User Manual/Support    –   PRJC Benefits

Does This Sound Like You?

 

A company with just six employees might typically have a bookkeeper spending 2 to 3 days per quarter preparing these reports from payroll journals and transferring this data to Excel spreadsheets to conform to state reporting formats. (Note that a payroll add-on program is often purchased to aid in creating these reports.)

A customer does striping and coating of parking lots. After starting with our compliance programs, this time has been reduced to one hour a week monitoring the gross payrolls. Now, the quarterly reporting takes just one hour (or a total of 4 hours a quarter).

The savings are calculated as follows for each quarter:  One bookkeeper at $17 per hour times 3 days = $408 per quarter versus 5 hours at $85. This amounts to annual savings of $1,292 per year for a typical small business. But even more important: those recovered 12 days can be used for more productive bookkeeping work, such as job costing.

WHY DON’T YOU  START WORKING WITH US AND SAVE THESE PROFIT DOLLARS, TOO?

Liberty Bay by the Dollar Savings

With our program, whenever a payroll is tallied, the bookkeeper is adding the hours worked to the compliance categories of ESD and Worker Compensation. The program automatically produces complete reports for these obligations. This feature dramatically reduces the time spent in gather the records of wages, hours and risk classifications to prepare quarterly filings.

There are four specific, and radically different, ways that compliance programs can save small business lots of money.

  1. Bookkeepers Hours
  2. Granular Payments of Premiums
  3. Save on Due Diligence
  4. Fines and Penalties

BOOKKEEPING HOURS

With our program, whenever a payroll is tallied, the bookkeeper is adding the hours worked to the compliance categories of ESD and Worker Compensation. The program automatically produces complete reports for these obligations. This feature dramatically reduces the time spent in gather the records of wages, hours and risk classifications for preparing the quarterly filings.

A company with just six employees might typically have a bookkeeper spending about 2-3 days per quarter to prepare these reports from payroll journals and transferring this data to Excel spreadsheets to conform to state reporting formats. (Note that a payroll add-on program is bought to aid in these reports.)

A company called Seal Pro does stripping and coating of parking lots. After starting to use our compliance programs, the time has been reduced to one hour a week monitoring the gross payrolls. Now, the quarterly reporting takes one hour(or a total of 4 hours a quarter).

The savings are calculated as follows for each quarter:

One bookkeeper @ $17/hr times 3 days = $408/quarter versus 5 hours @ $85. This amounts to annual savings of $1292/year for a typical small business. But more important, those 12 days can be used for more/other productive bookkeeping work such as job costing.

GRANULAR PAYMENTS OF PREMIUMS

By using our program, companies can apply multiple work/risk classifications to every employee and thus avoid paying the highest premiums for every hour for every employee.

For example:

A berry farm in Port Angeles expanded their operations to cut hay. After an audit, it was fined $14,000 in the highest ranching classification for not having a correct risk classification. All they had to do was apply for a new risk classification which was

no more than their berry operation class.

A small building contractor had a fabrication and storage yard. He had his employees work there to keep them busy. But since he did not know about this risk classification, he paid for a machine operator risk class at $11/hour vs. the yard class of $2.80/hour. The caveat for this type of operation was that the storage yard worker had to work in the yard for 8 hours to qualify.

By scheduling work ahead of time, the business owner could save the daily premiums amounting to $262 per month having the employee work one day each week or $3148 per year.

There are specific risk classification for 23 different industries in Washington State. Each has qualifying Administrative Codes with corresponding granular hourly exemptions available to any business if they knew they existed. Our compliance programs are capable to provide these small business how to use them.

SAVE ON DUE DILIGENCE

A terrifying example is an audit request by a state or insurance agency. This can be time consuming as payroll companies charge for the reports demanded by the auditor. A compliance program can make this task very simple as all data is historically available with a few keep strokes.

Anytime a company is acquired or is raising on an equity round, there is a need for due diligence. This can be so time-consuming and stressful. By having all of the payroll and compliance records available in one program, this can greatly reduce the cost of such due diligence.

For example: if a company is in the middle of such a due diligence, the upper management might spend one full month on this task. At just 100 dollars per hour, this can balloon to a $16,000 expense. Assuming that this will only happen once every four years, than the annual budget savings would be $4,000.

FINES & PENALTIES

Monthly reporting to these agencies is replete with serious consequences for failure to file on time, failure to correctly identify premiums, or failure to make the payments.

There are four kinds in Washington State but represent al states:

1. Unregistered Employer @ $500 each occurrence or 200% of assess premiums—whichever is the higher amount

2. Failure of keep records @ $250 per employee, per month up to three year; or 200% of premiums for each occurrence

3. False reporting or misrepresentation: 10 times difference in reported and assessed premiums

4. Insufficient records @ $250 for each offense

For example, a remodeler has his father help him on a weekend to install a mail box. A Labor and Industries inspector cited him as an Unregistered Employer and fined him $5000 for that (1) hour of work using Administrative Codes guidelines.

Large companies can be fined as much as 200% of assessed premiums that would total $100-300,000. Large heavy equipment pile driver, loggers, concrete remix and installation companies, and transportations companies have had these fines and penalties assessed. These fines apply to companies treating employees as independent contractors.

Such huge fines have effectively shut down many businesses. The fines are administrative and challenging the fines can be prohibitively expensive and unlikely successful.

Minnesota “In addition to other liability, an uninsured employer may also be fined by the department for failing to insure employees, regardless of whether an injury has occurred. The employer may be ordered to provide the necessary insurance coverage, to refrain from employing any person at any time without insuring the employee and to pay a penalty of up to $1,000 per employee per week during the time the employee was not insured.”

The most impact is interpreting how to handle the misclassification of independent contractors:

IRS “Impact of misclassification: If an employee is misclassified by an employer as an independent contractor, penalties may be assessed by the IRS under Internal Revenue Code Section 3509. The penalties vary depending on whether the misclassification was willful or not, and if not willful, whether proper returns were filed. In the case of honest mistakes where the employer filed IRS Forms 1099-MISC, the penalty will equal 1.5% of wages paid to the employee, plus 20% of the amount that should have been withheld for Social Security and Medicare tax from the employee, plus 100% of the employer’s share of Social Security and Medicare tax (the employer “match”). If the mistake was not willful but Forms 1099-MISC were not filed, the 1.5% and 20% penalties are doubled, and the 100% match remains. If the employer willfully misclassified the worker, the penalties will be equal to the full amount of taxes that should have been withheld (income, Social Security, Medicare and the employee match). Additionally, under Internal Revenue Code Section 6672, this penalty can be assessed simultaneously on the company itself and on its officers, personally, if they are deemed to be responsible. Finally, additional fines related to failure to file and failure to pay may result, as well as interest on the balance due. The employer cannot recover these taxes or penalties from the employee.”

Our program can greatly reduce this risk by providing an oversight on the assignment of classifications. The resulting savings could be as high as $300,000. In many cases, the penalties from these compliance authorities can be so high as to force the companies into bankruptcy.

Classification Audit Reviews—Forget About It!

That’s what most small businesses think when you mention the subject. Today, get out your checkbook and start writing them to the local Department of Labor workers’ compensation fund. This could be the Washington State Department of Labor and Industries AND the Federal Department of Labor if you have been reading articles in the Puget Sound Business Journal and Wall Street Journal lately. Scary stuff.

Classifying Bookkeepers and Accountings

The most thought bookkeepers, accountants, and payroll companies give to reviewing your classifications assigned to your business is: none. That is your responsibility by State and Federal law. You tell the accounting folks who worked, how many hours, and how much to pay, and they send in the quarterly report. Not that simple anymore.

Boutique for Small Business—WC Reporting

Classification audit reviews are becoming the vogue for small business to keep solvent. Now, they have to be reviewed every year to keep up with the changes in the reporting requirements. The assessed amounts by the government can put you instantly out of business. Most small businesses learn by word-of-mouth how to keep the books. Unfortunately, bookkeepers and accountants are not trained on employer workers’ compliance issues; only employee HR (human resource) state and federal compliance issues.

Case in point: Employers and independent contractors from all industries send time records for quarterly workers compensation reports never knowing if they are in compliance. Recently, the fifth largest payroll company in America was asking what the difference between employer and employee compliance reporting was. They did not have a clue.

The two new federal programs you have been hearing about are targeting employers who have misclassified their own employees and who have issued 1099s to independent contractors. They claim this misclassification is used to avoid paying payroll taxes on people who should be employees or covered workers. These programs are the Voluntary Classification Settlement Program to submit 10% of the normal payroll taxes for one year with a gratis for three years; and the new IRS 1% amnesty program for misclassifying employees. The latter may not be a good thing with the IRS probably sharing your information with other agencies according to Mike Reilly at Lane Powell in Seattle.

Redefinition of Independent Contractors

The state of Washington rethought the qualifications for independent contractors by reinterpreting RCW 51.08.180 Definition of Worker knowing full-well most one-person contractors are terrible record keepers. Thus, they fail the famous Six-Part Test under RCW 51.08.195 and RCW 51.08.181(for building trades).

When I was working for the Department, if a building trade’s person was licensed and bonded, he was independent. Not true today. The worst part is when a contractor had no idea he was an ‘unregistered employer’. The penalties are severe since most workers’ compensation funds are underfunded because pre-2005 building premiums are just not there anymore.

In April 2009, the Washington State Attorney General’s Office issued an Employer Services Overview paper declaring conditions of personal labor. It mirrors the California Labor Law stating that out of necessity or choice others were employed to do all or part of the work. In other words, an independent contractor better get a workers’ compensation account opened yesterday to remain independent.

Bookkeeper or boots-on-the-ground premium auditor?

As a certified fraud examiner and ex-contractor, there is very little difference by the time tax season comes around for saving disposable income to the independent contractor. I am sure this is true with the unscrupulous employer; but for the uninformed honest small business, they do not have anywhere to turn to find expert advice to conduct an annual classification audit review.  Most building associations do not have a true ‘audit department’. And most accounting firms just hand over the past history to the auditors not thinking about any compliance issues involved.

That is my point: classification non-compliance. It can be as simple as having a salaried 20 hours a week person working part-time with no time card. If audited, that company will pay premiums on the other 20 hours plus a 20% penalty. In addition, there are insufficient records penalties equal to $1000 a year, and if the auditor has to make dollar quotas, they can add on a misrepresentation penalty up to ten times the premium amount. I kid you not.

So, do yourself a favor. Find a competent classification audit reviewer each year to keep up with the changes in federal and state compliance workers’ compensation reporting. You will stay in business much longer.

For more information, contact Ted Carlson at Liberty Bay Consultants, LLC—a Certified Fraud Examiner specializing in workers compensation compliance reporting and audit representations!

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