Common Mistakes Made with Payroll and How to Fix Them

Leo and Claudine welcome Joshua Gilbert, a territory manager at Heartland Payroll and HR Solutions, to discuss the most common mistakes businesses make when approaching payroll and how to set yourself up for a success in this area of management.
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Speaker 1 00:22 Good morning, Modesto. Good morning. You are listening to business and legal talk with Leroy, Claudia and I am your host Leal and diverted with green land and here is my beautiful CO’s, Claudine say hello
Speaker 2 00:33 morning. Happy Saturday. Hey happy Saturday to you. Are we happy that it’s not so windy? I’m pretty sure that was about to get blown away this whole entire week. It’s been crazy. Yeah, that’s what’s up with that. I don’t know the wind, it’s kind of a bummer because it’s knocking, um, the happiness out of the sunshine.
Speaker 1 00:52 Well we have a great show for you today. If you’re listening. We are all about being actionable. We give actionable advice and we’re all about helping business be profitable and sustainable. I help them with a profit and you helped them all being sustainable. So we make a great team. Yes. And thank you so much for the feedback. We’re getting some great feedback about the show and you know, we try to be real and transparent.
Speaker 2 01:15 Absolutely. And you know, if there’s any ever a subject that somebody wants us to kind of maybe focus on or think about, um, definitely hit us up on the websites, give us, give our offices a call. Um, we’re always open to feedback and interesting ideas. Things that are important to the people listening.
Speaker 1 01:30 Yeah. So today show, um, we, it’s something that we talk about quite, quite a lot. Uh, indirectly it’s payroll. So, you know, we’re going to be talking today about payroll. We have a great, uh, uh, guest today. His name is Joshua Gilbert with Heartland. Pedro. We’ll, we’ll get to him in the next segment. Uh, but we will be talking about payroll and everything and how complex it is. And if you were to take that on, think twice before you take that on, on yourself. So, so Josh is going to be, uh, he’s a fiery, a professional and he is a real deal. Sales Brower. He’s just a lion. That’s right. Great. Great friend of ours. So, but before we get to that, we’ve got stuff to talk about what’s going on in the central Valley. Hey,
Speaker 2 02:15 what’s going on? Business is good. Business, business is good business. So we’re getting great feedback from our businesses, our clients business is growing, things are moving. And it’s really, really exciting. It, you know, we had such a long period of time where things were just, you know, not doing well financially, economically, and then people were afraid to grow. Even after that, they’re afraid to put, put themselves out there and maybe, you know, hire those extra employees. And now we’re just, you know, things are just growing, growing, growing. And so we’re really excited for our clients. Um, and our offices are growing too.
Speaker 1 02:47 Awesome. Yeah. So I, I, you know, we’re, we’re getting into this habit of the business and the legal updates. So we want to take the first segment to kind of bring you up to speed. If you’re a business owner and if you’re driving right now to and fro and in his beautiful Saturday, uh, Sunday morning, uh, that if you’re a business owner, you should be listening to us and she’d be saving our show. You should be marking our show and, and, and here in power talk that so you can tune into this business updates. Hey, tax deadline, April 15th yet, are you ready? Are we ready for it? Well, it’s more, I guess the better question is, is the CPA doing the taxes ready for it? We’ve done what we could do. I know at this point it’s in the can as they say. It’s true.
Speaker 1 03:28 I mean it, you know, I, I deal with day to day accounting issues, but I don’t, I don’t file it. I mean, I, I would not, I couldn’t live with that kind of deadline. You know, like a lot of my friends who are CPAs, uh, are, this is the time that they actually work 14, 15, 16 hours a day. I mean, they basically live at the office and making sure it, it’s, it’s a different lifestyle and um, and so people love it and some people thrive on it. But the point is that the tax deadline is, this year is a pro 15th, which is Monday now. Yep. Too late to do any pre tax planning because the year is over. So if you didn’t do everything right, it’s too late. But there’s a couple things you can still do, okay. If, um, if you’re trying to shore up your, your, your personal taxes.
Speaker 1 04:07 So your, uh, your IRA, if you haven’t funded your IRA, your individual retirement account, you can still do that. Uh, so loan as when you are actually making that deposit, you get some screenshots, you gotta protect yourself and it’s gotta be for the 2018, um, year. Because if you’re going to make a contribution and you do it online and you can do a bank transfer, you can do that all the way up to Monday. And it has to be, you know, prior to the, you know, on the deadline, right? And you’ve got to protect yourself that you actually did it. And not only do you have to do it by Monday, you have to do it for the right tax here because you can actually make contributions for 2019 in 2019. Whoa. What a concept. Right? Right, right. But if you’re going to do it for the prior year and get the credit for it, you got to do it over the weekend or party by Monday.
Speaker 1 04:51 So that’s as well as well, you can still file for an extension. You can file away till midnight to a Monday. Yes. Yes. I mean, you know what I tell my clients is, look, it’s, it’s not good when you’re constantly amending, you know, tax return. So if you’re not fully ready, I agree with you, you just gotta do it right. And you know, by getting an extension, does that mean that you’re going to take all the way to, you know, if you’re, if you’re a corporation all the way up to September 15th no, you’re not going to do that, but you want to do it immediately. If you need an extension, make it like a two, three week extension. Don’t wait six months. It’s hard to remember what happened last month and our businesses, it must, you know, much more difficult to remember what happened last year. Well, I think a lot of this is key to having the right team behind you on the bookkeeping side because that’s part of being ready. Yeah, that’s a plugin. Thank you. Green land here. Oh, you have to help you come on. Shameless plug. Shameless plug. It’s really true. I know that, you know, as far as my office goes, when it comes to being prepared for taxes, we’ve already done the work. It’s, it’s the bookkeepers at this point who needs it all up and have they been keeping
Speaker 2 05:57 up with it or are you that business that does it at the last minute, um, you know, started a week ago gathering up all your books for the year. I have done that. Not, not, I don’t do that anymore, but I have lived that life. It is, it’s incredibly stressful. And, um, I know that there’s a lot of micro-businesses who probably still do that and I would highly encourage you to, uh, let 2019 be the year that you, you know, maybe have some bookkeeping assistance so you don’t have to get,
Speaker 1 06:24 come on, come on, talk, keep talking. I can listen to this all day. Thank you. Thank you. You know, and in cardiac, the urine, the urine, the other side where the grass is actually greener, right? You’ve come, you come through this period where you were catching up, always catch up at the last Maynard and when we’re in a hurry to do our tax work, right, it’s never right. You can never be too careful. And speed is the enemy of perfection when it comes to tax work, you want to do it right. So you write about, Hey and by the way, 2018 was the most robust change to the tax code in the last 20 years. So I am constantly getting feedback that there are changes. That ripple effect for business owners is actually coming out. You know, the jury’s still out, but it looks like it’s going to be much better for businesses in file in 2007 18 versus 2017 and you can see the side by side comparison. A lot of businesses will fare better.
Speaker 2 07:18 Interesting. And, and I think that there’s this kind of double edged sword is because when, when business is doing better and you’re enjoying more profit, then that has a tendency to cause you to Oh yeah. Whereas in previous years when things were not going so well, we just didn’t know so much and all of a sudden you get the tax bill and you go, Hmm, okay, there it is. Yeah. But you know, that’s, that’s the double edged sword of, of profitability. And you know, you try to make the best of it and, but recognize that if you’re owing a little bit more, it’s likely because you’re been doing it
Speaker 1 07:50 well. I hope you hope make a whole heck of a lot more money than the prior year if you’re going to pay a little more taxes. Right. The point is pay as little as possible. Hey, so that’s me on the business side. Um, legal updates, anything exciting that we should know about that has happened? The us, any juicy stuff?
Speaker 2 08:03 See, well, we know w everyday we’ve got ADA claims coming. And if you’re a business owner and absolutely re, um, highly recommend that you get together with your landlord and, um, have a conversation about ADA risk, um, and, and your building. I know, um, we were just looking at some new office space and it was an upstairs building. It was perfect for us, but it was upstairs with no elevator and I just could not do it. And, um, it, it’s a, it’s, it was a gorgeous space and it was perfect and the price was perfect. Um, but I ha, I highly recommend that you sit down with your landlord and strategize. You can hire, um, a certified specialist who will come in and look at your place and do an examination of your place. Um, tell you what the risk is and how to Fisk fix it and what needs to be fixed.
Speaker 2 08:48 And you can get together with a contractor and do that proactively. Because I’ll tell you the cost of having the specialists come in and do an evaluation of your location is a scintilla of what ADA suit costs now. And there’s no defense to it. Here’s a dumb question, right? So if you are a tenant in a building and the, you know, you have a three year lease and then the business that your unit or your suite gets, um, you know, you get entangled, the landlord gets entangled. Do you as a business owner, what liability do you have? Well, all of it because typically your lease is, um, is going to put the responsibility of ADA compliance is going to be put on the tenant through the lease. That’s pretty standard. However, everybody needs to understand that both the tenant and the landlord ended up getting sued and it’s B.
Speaker 2 09:42 The reason being is because the landlord is the one with the asset. The tenant may be the one with the business, but the landlord has the asset, which is the building. So no matter how it, how it goes, what your contract says, everybody gets wrapped up into it. And that’s, that’s why you really need to have that conversation because we need to be realistic. Landlord should not just assume that because we have it in the lease, that we’re not going to get in tangled in it. And tenants should not just assume, Hey, it’s the landlord’s building. It’s their problem. Okay, listen to listen up right now. If you are driving and listen to business, illegal talk with and Claudine, you need to pay attention to the Jews. Got hundreds of dollars worth of legal advice is, you know, thank you, Claudine. You can never be too careful.
Speaker 2 10:20 You can never call completely insulated from any legal action against a landlord. If you’re a business owner and you’re occupying space, if you got, you can’t go at it blindly. You got to have the right people on your team. And the Claudine, I mean like I keep singing your praises, but you’re keeping people out of hundreds of thousands of dollars worth of legal claims, right? I can tell you that it’s, it’s, it’s unbelievable how quickly it goes because the cost of the repairs is one thing. And a lot of the repairs have to do with city sidewalks, the grade in your parking lot. Um, a ramp grade where as years ago the grade on the ramp entering the building was um, compliant but now it’s not compliant because the, the requirements have changed. You cannot spend money any more wisely than if you go and get an evaluation of your building, sit down with your landlord and have a conversation about how are we going to address this because you are just sitting as an open deck just waiting for somebody to um, and try to enter your building and they can’t enter it because you haven’t made it accessible.
Speaker 2 11:17 How many business owners do you think that are actually looking for office space are actually thinking about that? I mean your experience like they actually walk into a looking to grow and look into office space and ADA is not even a thing I think. No, I think the larger problem is that people look at it and they see a handicap sign on a bathroom and they see the doorway is wider and they presume that Oh, we’re compliant. Or they see a ramp and they think, Oh, we’re compliant to the space is 36 inches or am just be fine. Yes. And, and what you, what we don’t realize is actually that place is probably no longer compliant when it, when it was compliant 10 years ago or it was compliant some time ago. Wow. Parking lots are a killer. Parking lots are a killer.
Speaker 1 11:58 All right, so you’re listening to business illegal talk with Leo and Claudia here on power talk am 1360 here, Modesto and Stockton. So stay tuned, we’ll be right back.
Speaker 3 12:28 Dope. welcome back. You are listening to business and legal talk with
Speaker 1 12:56 Leo and Claudia and two. There we are on fire. There is so much going on. You know what I, I, I’ve grown to really love just being here doing this show. Uh, we uh, we love to talk and we love to be real and uh, we know business, so business and legal talk hands, not their name. So, um, you know, we talk about all these topics every week, but we sometimes forget to talk about, you know, why you need to work with, you know, what we do and why you need us in your site. You want to have Leo and Claudina on your side. If you have any questions about what we do in the accounting side and how we help companies grow and, and, and, and you know, it’s scaling and profitable. If you are a business looking to scale, we need to talk, go to www.greenlandgrenlandhq.com and learn more because you know, I know I often be compared to the guy, you know, Marcus is from the profit and really I can walk into a business and really assess it within three minutes. All I have to do is look at your financials, but this is what we do because we love doing it. And Claudia, tell us about yourself.
Speaker 2 14:00 Well, we’re a business and real estate firm in Turlock. We do, um, do telecommuting and we do travel to clients. So if you’re out there in the central Valley, um, don’t think that you have to necessarily come to Turlock. We do a lot of, um, telecommuting with our clients. Um, clients are busy. They’re out there and they don’t necessarily have time to even, you know, pack up their business and come in. Even if we were in the same town. It takes, it takes quite a bit of time. Um, and we are working with clients day in and day out to help them stay alive, to navigate this treacherous business environment that we have in California and to stay protected and, and protection is all about it. So you can make $1 million, but I’ll tell you, you can lose it real quick over a lawsuit. So, um, proactive, proactive, proactive. We are looking for clients who want to be proactive about their business.
Speaker 1 14:48 You have a sweet spot for sort of verticals, right? You certain industries, which ones are those? Well,
Speaker 2 14:53 we work a lot in the construction industry, the service industry and um, uh, you know, construction and service industries are really big here in the central Valley. Um, but that’s not all we do. So we’re, we’re here to help you out. You can find us on the [email protected]. That’s S
Speaker 1 15:08 H E R R O n-law.com. Awesome. Hey, so we’re taking calls today, so if you have any questions, we’re going to introduce our guests right now, but our studio line five (209) 551-3483 I repeat, five five one three 43 if you have any call or any, any questions you have on payroll or anything for that matter. So let’s talk about our guest today. So his name is Joshua Gilbert. I’m going to paraphrase, um, if I both, you know, if I do something wrong, just, you know, correct me, Josh, but you are a Josh Gilbert started his career, uh, in 1994 a few years back. So he, uh, it’s been in the payroll and HR industry for over 18 years and spent four years in the medical sales as well. Uh, married to his beautiful wife, Angela. I have three boys, rambunctious I here and he could not pursue what he does without the support of his wife.
Speaker 1 16:00 This is a family man, uh, uh, a consummate sales professional through and through. He lives in Clovis, California has been gracious enough to come to business legal talk with nucleus. Say hello Josh. What’s up? Good morning everybody. Good morning. Good morning. Everybody get paid this week as far as I know. All right. My wife called me out a little longer. Her shade. You guys make it fun out here. Thank you. Thank you. Yes. You know, and the reason, one of the biggest reasons why you’re here is because we often are talking about payroll, you know, and we, I say payroll is your biggest expense and you got to go. I would Weiss eyes wide open. You’re staff is an asset to your business and you gotta be managed property unless it becomes a liability. But a lot of what when he becomes a liability is not handling payroll taxes, property. Oh, so, right, Claudine?
Speaker 2 16:56 Ouch. Yeah. And I know, um, you know, um, and I’m just gonna throw this out there, Josh. Um, where we’re now working with Heartland and we really appreciate the service and the attention to detail. Um, we did not realize previously, um, the company that was working with us would file our taxes. I think on a quarterly basis. I know I would get a message that says, you know, here this is, this is what we’re filing. And, and it was a quite a large bill, but your service now does it every payroll. And we love that every payroll. So it’s a little bit easier each payroll to do it rather than have a five or $6,000 bill, you know, quarterly or something
Speaker 1 17:32 cash drain. So it’s a nice budgeting tool. You don’t want to have a big bill at the end of the quarter. We make sure that you’re set up so that every pay period there’s a debit for all the liabilities if we make the deposits for you.
Speaker 2 17:44 We love it because I’m, I’ll tell you one of the things as a business owner we’re afraid of is, you know, obviously the cost of payrolls and the cost of employees and having somebody else handle it makes us really not that worried about it. Maybe we’re just not focused on it.
Speaker 4 17:58 We let you focus on it. So payroll, payroll, I did some homework and I was, you know, cause I’m always thinking about payroll, you know, and we’re, by the way, we do not, we’re not just theoretical people trying to talk about business or talking about business. We actually practitioners, we actually have businesses and we have payroll. Um, Josh walk us through. So I asked you to come up with some, some, some topics to discuss today and that you have, I see a couple of common mistakes and payroll. Walk us through him. Tell us what’s going on. Yeah. You to kind of hit on a couple of key phrases. I mean, you talked about risks, talked about working from behind something we don’t want to do. Um, I don’t think employers understand sometimes that when you decide to open your doors and take on employees, there’s a lot of liability and compliance that starts coming into play.
Speaker 4 18:38 And payroll, in my opinion over the years was being commoditized. But I’m in the business because I want to help my clients. I want to have a voice in the community and I want to make sure that they understand this is a relationship business and that they need to be taken care of. So after someone registers their business with the state and the IRS, there were a handful of things that we kind of talked about in the first one was, are we budgeted properly for payroll as an employer? Um, I mean, what do you to do to budget? You know, some of the things you think about, not just payroll, but there’s a lot of other topics.
Speaker 2 19:09 Well, I can tell you, Leo has helped me extraordinarily in that area. Um, and really when he started working with me and we were really going through, um, or approaching a real growth phase, and, you know, attorneys, they’re not, um, you know, $15 an hour employees, they’re, they’re expensive employees and, and payroll costs are relative to how much you’re paying your employees. And so he really helped me sit down and kind of backward analyze it and break it down, um, from the backside and how many, you know, how much is it going to cost? Therefore, how many hours do we have to do, therefore, how many clients do we have to have? And then the metrics. And then we arrived at a, at a, uh, this is what it’s gonna look like. Can we accomplish it? We said, absolutely, yes, we can. And here we go.
Speaker 4 19:53 Right? Yeah. So one of the things that I do when I meet a new business owner, and I do meet a lot of them regularly as I help them budget, how do I budget for payroll? A lot of them think the employees pay the taxes. What about the employers side? So just to give everybody a, a number, um, you know, your taxpayer knows an employer is about 12%. It’s actually 11.75. But for the sake of conversation, we rounded up to 12. Right? So if you pay me $1,000 every pay period, it’s going to cost you $120 Claudine and payroll taxes. Gotcha. So people need to understand that. So they budget. And then on top of that, what about all your insurance needs? I mean, you to know a lot about insurance. You’ve got worker’s comp, which is scary. A lot of people don’t carry it at all.
Speaker 4 20:33 Um, and then we have things like general liability, APLI E and O coverage and your neck of the woods. I have story after story after almost 19 years in the business of people that don’t have coverage. And unfortunately we live in a litigious society, so we want to make sure you’re covered. Otherwise people are wise enough to maybe come after. So that’s interesting. You actually proactively work with your clients to make sure or at least address have a conversation about the topic of insurance. Correct. Really? Yeah. So what I’m doing is I’m trying to make sure that from a to Z they’re covered and worker’s comp benefits insurance is a big part of what I do and I actually partner with people in the community to get my clients connect. I’ve seen it play out time after time. Yeah. Leo and I have done a lot together.
Speaker 4 21:12 We’ve done a lot together. So let me ask you this. Yeah. What makes you different? You know, we hear about the big outfits and the big call centers and the big payroll companies to remain nameless or the banks or the banks, you know, banks, banks want to do payroll, banks want to do your PR credit card processing. But it’s able to be, you know, to me it would be the equivalent of going for surgery with a family practitioner. You know, if you go to a family doctor and he says, we don’t have brain surgery, we will, you escape, will you feel comfortable? It’s getting your brain surgery with a family practitioner. Know you want to go to the experts in Pedro. You have to have an expertise in what you do. So what makes you different? I went back into the business after a four year hiatus and medical sales because I love people and I want the relationship connection, right?
Speaker 4 22:00 What’s unique about Heartland, where I am, is our credo as entrepreneurs, respectfully serving entrepreneurs. And so my focus is to have that ongoing relationship after the sale is actually made. And the reason that we can do that is I’m just, I’m a, I’m a straight commission salesperson. That is not the norm in this business. Can you believe it? Professional you mean so you don’t have a check page? I don’t have a check. I have to earn my business every day, every month. So there’s a residual component to what I do. So it behooves me to stay in front of my clients. So, you know, I do updates on HR, I like to do followup with my clients, get involved where I can. So there’s this and I, it, for me, it’s all about, I’m the face of Heartland. So that’s what makes me different. And for the record, we love Heartland and I appreciate that you use us.
Speaker 4 22:41 So you’re kind of a nice success story. Yes. It’s like the hair commercial. I’m not just the precedent. I’m also a user. When you have good hair, you got great hair with gray hair. I’m not just the doctor, MTV or something. You don’t just play doctor on TV. So walk back to the common mistakes and pay. Yeah. So the budgeting piece, so do you want to have benefits? I mean, benefits are a great retention tool. If you want to bring in qualified people, be competitive in the marketplace and recruit, you can have benefits. There’s a cost to that. Right. What about things like time and attendance? You know, are you going to put in a time and attendance system? A lot of people don’t think about that. Speaking of that, sorry if I cut it. Yeah. How do, and your experience as you run into business owners, how do they, how do most people keep time and attendance?
Speaker 4 23:26 How do they track it? It’s still manual. How? It’s still, man, they track it on an Excel spreadsheet or they go to let’s say office Depot and they buy one of those old school clocks or you punch cards still. But 40% of of businesses in America still do a timed attendance by hand. Wow. 40%. Yeah. It’s a lot. It’s a lot. So what was the 19 is still happening, right? It’s still happening. I mean with all the technology out there, we have biometric technology now where it reads of a fingerprint or your face, right? You know, we’re getting into James Bond land here, you know, some of that kind of stuff. But, um, what we found is when somebody puts a system in place, they can save about 4% annually on their payroll expenses. 4% correct. So if you have a very large payroll 500,000 a year, that could be 20 grand.
Speaker 4 24:11 That’s a lot of money. Wow. So just think about numbers like that. And I’ll tell you, it’s from a, from a legal standpoint, from a, from a standpoint of employment law and litigation. Um, that is risky. And I did not know that because boy, I’ll tell you what, um, wage hour lawsuits are, are the top of the list. That’s the number one thing that we go after. And as you know, no, I shouldn’t say we go after, but I should say people who are litigating or suing businesses, I mean wage hour stuff. And so not having that, that timekeeping mechanism, um, in something that’s absolutely concrete and reliable is, um, yeah, scary. It puts a system in place and prevents what we call buddy punching. How many times you’ve heard people say, Hey dude, Hey, just stop. I’m about 10 minutes late. Just clock in for me.
Speaker 4 24:58 And yeah, it happens. I mean, I’m not saying people want to be dishonest, but they know they’re late for work, but they want to make sure they’re accounted for. Right? So it’s little stuff like that. Boy, that’s risky. We’re taking calls, Hey, if you’re listening to business illegal talk with Leon, Claudia here in power talk, call us five, five, one, three, four, eight, three. We’re talking about payroll and how to do it properly. And here we have a professional. But the thing I like about you at Josh is you ooze knowledge on payroll. That’s clear to all of us. I appreciate that. I think what I appreciate most and what you want as a business owner wand with your vendor is a partnership. Correct. And the way you come across is you look at them from a holistic standpoint. You look at a business, yes, you can help them with payroll, but they used to asking questions about things that owners are not thinking about.
Speaker 4 25:49 Hey, you know, your insurance. When was the last time he was evaluated? A way you just, you know, these financials are, who do you ask this thought? Provocative questions. Why do you do that? I’m, you know, I’m genuinely curious. I mean, you know that about me, Leo being around each other for years now, but I just enjoy helping get people connected. I have a lot of connections outside of what I do directly. I’ve got social media connections. Claudine, I know I’ve sent some people do to help them understand what entity type they should be. There’s just a lot of different things that I don’t know that, that, you know, people need help with. And I want to send them to an expert. I’m not an expert in, I’m not, I’m not an accountant, I’m not an attorney, but I feel like I’m knowledgeable and I try to help guide people. Well, I’ll tell you, Leo and I have talked about this on previous shows, is that there, there’s this real need for business owners to work collaboratively with their resources and not to just
Speaker 2 26:44 go over to your attorney and have a conversation and then leave your attorney and go to your accountant and then have a conversation. Because when the attorney and the accountant and the CPA and the payroll person, when we are the insurance person, we are not all communicating. We’re not providing the best service. So one of the things our office really strives to do is work with our business owners and their other resources. Um, not just work with our business owners because I can’t tell you how many times I could sit in front of a client and give them a certain piece of advice that the CPA is going to go, Oh no, that’s, you know, let’s do something completely different. And what happens is the client just ends up being confused. Um, and then w then oftentimes not either not doing anything or not making the appropriate change. Yeah. So when, when you’re having that proactive conversation with your clients, because payroll is, and perhaps in the next segment we can talk about, um, labor code two to six, cause I’m sure you’re very familiar with it, but it is a huge liability. It’s a huge cost to the business, just the cost alone of, of paying your employees. But the liability that comes along with making sure your payroll is correct.
Speaker 1 27:48 And we T we assume liability for all that. So all client really needs to do is they need to make sure they have money in the bank. Right. Tell us how much to pay the employees. We do all the rest. We take all the complaints. Man. It makes it a breeze. What people need to understand, what you need to understand as a business owner, this is a transfer liability. When you’re doing payroll in house, you’re taking that liability personally, correct? Yes. Survives the business. He attaches to you personally. And I think a lot of people, there’s a, there’s a misunderstanding that, you know, as a CFO why worry about two things and I know, and you can quote me on this now is the, if you work with me, you know I worried about cash risk, right? Risk, it’s payroll if not dump property and cash. But you’ve got to have the money to fund your, you know, your payroll. So I’m more on that. There’s a bunch of other questions that I have, but right now, uh, I hope you haven’t found, we are, you are listening to business, illegal legal talk with Leo and Claudia. We’ll be right back.
Speaker 3 28:47
Speaker 0 29:11
Speaker 1 29:14 let’s go back. You are listening to business illegal talk with Leo and Claudine. Oh, I just love saying that. It just kind of rolls out nicely. So it’s meant to be morning, April 13th we’re talking about payroll. And we have a great guest. Today’s name is Josh Gilbert from Heartland payroll. And we’re talking off off the air. Um, gosh, there’s something about you that makes you different. You have this infectious personality, there’s about compelling. And I want to ask you, well, what gets you up in the morning? Well, my faith number one coffee. But I’d have to say, you know, the people that get me up in the morning, it would be my beautiful family. We have three boys, Jaden, 15 Zander, five Beckham is three. And then my beautiful life, Angela, who has the hardest role in the world, she stays home full time. She allows me to do what I do.
Speaker 1 30:06 You couldn’t pay her enough? No, no. I couldn’t even afford her bring her in. But you know, that’s what gets me up to doing what I do. And I enjoy the relationship piece. I mean, I like connecting with people every day and I feel like I kind of have the best job in the world. I get paid to do that. Yeah. Wow. Wow. That is awesome. So listen, I think that running a lot of what I really appreciate, and this is not something that we are constantly talking about, but we have mentioned or referred to from Tacoma, it’s mindset. It’s the mindset that goes on into being a business owner. And you are a business owner. Yes. I mean you really are running your own business, but you said commissions and all that. How many people can do that? That’s, that’s my respect. I appreciate that.
Speaker 1 30:46 It’s not for everybody, but um, I got tired of kind of the corporate mentality and I had to do some for me and my family. Right. You’re on our side. I mean, we stopped working. We know we, we, we, we are consummate salespeople. Claudine and I were out there and w but we’re passionate. I don’t think what I do, it’s work. I just loved engaging people and helping them. If you help enough people get what they want, you inevitably will get what you want. Absolutely. I mean that goes back to Napoleon Hill and think re rich and grow rich. Right. Growing up. So back to payroll. All right. Yeah. So, um, I have this list of common mistakes. Have we covered them all? I know Claudia, you wanted to talk about some
Speaker 2 31:24 well yeah, and you mentioned a really important thing that um, I, I want to advise business owners whenever you have the opportunity and it’s affordable that you can transfer risk, do it anytime. I mean there’s always a cost with transferring it so sometimes it’s not affordable and you, you just need to do it yourself. But payroll is one of those things that um, you know, we and we had talked about 88 businesses are just completely wide open to ADA claims. Um, and they don’t realize that. The other thing is, um, payroll people understand need to understand that there is a labor code in California. Labor code two, two, six. It outlines nine specific things that have to be on a pay stub. And if you don’t have those nine things on a pay stub, you in, um, are liable for a penalty for every week or every pay period that, that information was not there.
Speaker 2 32:17 So then, and that’s just the labor code. Then we have Pago which is private attorney general act of California 2004 that all you need to know about Pago is that it basically doubles your trouble. So it’s two lawsuits happening at the same time. So then for every pay period that you did not have a correct address on your payroll or your pay stub, pay period, beginning and ending date. Um, I had a client who, um, they had the pay period ending date but did not have the beginning date and we got sued and it was a class action and, and it was a pug on top of it. And we had almost 50 employees who got paid weekly. So, um, it was, it just an overwhelming disaster. And in our research we found that the courts have said you must have the payroll beginning and ending date.
Speaker 2 33:13 It was a lawsuit that involves FedEx, as I recall, FedEx. And it was an enormous class action lawsuit and FedEx fought it all the way to the end claiming that they, the employee knew what the pay period was if they had the ending date and the court said, no, you must have the beginning and the ending day. Every paycheck they pay the pay period that he covers. Yeah, and I’ll tell you from the standpoint, I’ll let you talk a little bit more about this, but from the standpoint of litigating on behalf of employees, when an attorney takes a case on behalf of the employee, the first thing they do is ask for a copy of the employee’s personnel file and pay stubs are to be included in that. So every pay, why are pay steps included? Because that’s a first thing we look at it because that is a dead to right. If you’re in violation, there’s no defense to it. You either have that information on the pay stub or you do not and it’s a penalty. So that’s the first thing that attorneys do.
Speaker 2 34:12 They want to subpoena the employee files. They don’t even have to subpoena. If an employee requests a copy of their employee file, you must get get it to them. Really? Yeah. And there’s there, it’s 30 that 30 days, 21 days. And there’s a little bit more into that. But just suffice it to say you must provide it and what is to be in there is a copy of timecards and payrolls or paste. This is where labor law compliance comes into play. I mean from my experience at Califor, I came from Oregon originally. California is one of the most employee friendly States. Absolutely. Second only to New York, I think. Correct. And it’s a little bit scary. You can really get put in, you know, in the weeds here, right? With payroll. Um, the average HR manager in California is $80,000 a year plus benefits unless you’re in LA or San Francisco where it’s over a hundred thousand.
Speaker 2 35:04 Right? We’re higher, we’re 6% higher than the national average. So what you’re talking about is HR, labor law type of stuff. Absolutely. And if you can defer that to a competent payroll company. The company, the client that I was dealing with, they had actually purchased their software through their accountant who had recommended it and it did not have the capability of putting both the beginning date and the ending date on the pay stub. So we actually went through a period of time where it was as the paychecks go out folks, let’s just write that by hand. No way. How many, how many face stops we had, I’m almost 50 employees.
Speaker 4 35:38 I think it was at the time, it was like 47 and the company was a company that had traditionally paid weekly. Yup. So it was a big burden. Um, and when things are written by hand, a lot of times there’s no check stub. It’s just a check. So they go to the bank and they cash it. But where’s the stub? Where’s my year to date earnings on that? How do I know? You know what I’ve done for the year, what am I deduction? So it’s very important that your pay stubs are done correctly. And if, boy, if you can defer that liability to somebody who’s competent and who gets it done. We, we have a company, Josh and I are in to remain nameless, but we have come in contact with different, Nope, we don’t want, I mean, I personally don’t work with everybody. If there’s a business owner who will play, won’t play by the rules, I don’t want to, I don’t want to have to deal with it.
Speaker 4 36:21 It’s as much liability. I don’t want to be within one click of somebody who is not doing the right thing. Right. Because we’re, we’re also taking on liabilities. We have taken on liability as advisors, you know, you and me. And if somebody is willfully violating and doing things that they shouldn’t be doing, but um, things like accruals, you know, like, Oh, what a big mess. You know, you gotta be keeping track if you have, you know, I know, I see on our list of topics on, on, um, yeah, there’s a lot of state and federal mandates. You know, the, the California, well, California paid sick leave, that’s a whole new thing. What he, July 1st, 2015. Correct. Give me the law and then you have to provide 24 hours and w whatever verbiage comes with. But that’s an illegal mandate. But then you have companies that offer PTO combination of paid time off, I mean paid time off, meaning a accrual vacation.
Speaker 4 37:07 How do you guys handle that and how often does that happen that companies are not keeping track of it? Um, a lot of people do it in house and they might use a, they used a payroll company and then they’ll track all the accruals in house. So it’s two separate places. I have somebody recently where um, the payroll company they were using, they just weren’t confident. So we have a very robust accrual system where we can show amount earned, what they accrued, what they use, the balance and it’s on the employees paced up good. And then they actually have online actually they know every time they received a pace that where they are. So how many accrued hours they have that they can use against for vacation, you know, from experience with the California paid sick leave. You can either do front load it or you can do an accrual.
Speaker 4 37:51 It just depends on what kind of employees you have and what’s your philosophy is. Right. A lot of people do a little bit of, you know that one or the other, but I’ll tell you, um, failure to pay your paid sick leave going to get you in big trouble. And I’ve heard of some lawsuits that have come out of that. People are litigious society we live in. People are smart people. They look for that. They do. And I have a, we had one recently that went through the labor board. The, the Mount that was not paid was under $300. That by the time they got done and, and adding up all the penalties, we were almost 8,000. Yeah. Well I’m hoping you, I hope you’re paying attention. You listen to business illegal talk with Leah. Claudine, stay tuned. We’ll be right back.
Speaker 5 38:30
Speaker 0 38:51
Speaker 4 39:00 are you paying attention? Are you a business owner? If so, you should be listening to business illegal talk with Leo and Claudine. We are having so much fun today. I don’t want it to end. Uh, inevitably it has to know and it’s crazy because, um, business owners, we, we, I think we’re just all kind of, uh, you know, a different breed anyway. We can really have fun conversations over things like payroll. We can make any topic fun we can’t normally do. People don’t want to talk about this boring things become alive. Sleep better at night if you face the dragon and get your resources and right arms with solid resources, solid advisors. And it’s all about working together. Yeah. So right now, Josh, I’m going to give you a 10 minutes. Google for glory. Wow. 10 whole minutes. I did not do, we interrupted about 30 seconds.
Speaker 4 39:53 No, go for it. What makes you different? You know, in Heartland, the whole thing, once again, it’s all the real, it’s a relationship component. You know, I don’t actually process the payroll. I’ve got a great team behind me where we give them a single point of contact to deal with someone that’s not a call center. I really believe the relationship piece is what’s key. And that’s why I chose Heartland to hang my hat on. I want to build my business. And for those who don’t know, Heartland’s quite a robust company. We are, we, when I meet with someone, I talk about, we’re a business solutions company. So we do merchant services, we have lending, uh, we do analytics, we have e-commerce. So there’s, there’s a lot of things we do beyond just payroll. I happen to be in my sweet spot, which is payroll and labor law compliance.
Speaker 4 40:32 Right. And I love your newsletters. I really do. Um, they’re, they’re interesting. I have you, and there’s one other entity that, um, puts out kind of on a regular basis, um, an HR newsletter and both of them, I always take time to stop and read because they’re, it, it takes a lot to stay up on what’s going on. And it’s another way for me to just stay in touch with my clients. I wanted to know, I’m thinking about them. There’s a lot to think about. I mean, just a few other things to touch on. Most people don’t know that there’s now a mandate for sexual harassment training in California. And why did this start? The me too movement from last year sparked this new topic. Yes. So basically what I’m a business owner has to do is, um, the old rule was, Hey, you got 50 or more employees, you have to do supervisor training every other year, uh, two hours.
Speaker 4 41:20 Right? And that was about it. Now, if you have five or more employees, you now have to do every other year supervisors, two hours of training, uh, regular employees and hour. But you have to, this done and that starts, you have to be the first go round if you all is do 1231 of this year. So if you don’t have this done and you get audited, you get some pretty heavy penalty, right? No, by audit you mean you didn’t to have the paperwork that the signatures of everybody that attended and the content that was gone over, there’s protocols that you’ve got to have protocols. It’s not just saying you did it. You’ve got to have proof that you did it. Correct. We have some solutions at Heartland and then there’s also some nice web based solutions that are cost effective that I, I’m actually going to go through one myself and then share that with my clients.
Speaker 4 42:04 That’s great. So you actually, again, we’re all about the proactive approach. So you’re out there actually proactively working with your clients on those types of solutions too. So this is not just about getting a check to your, your, no, I mean that’s why I have Claudia. That’s why I have you. Yep. Leo and I, I’ve referred a lot of business to Leo because people need what he does. I don’t do that, right? We don’t sell any insurance at Heartland. I focus on this sweet spot. We call it staying in our lane. So I’m doing payroll, I’m doing HR, I have other experts for other things and insurance, you know, et cetera. But the mandates are huge. And we do have an HR component where we can build people a handbook and customized job description. It’s not just a temporary, it’s actually getting down and dirty with the client.
Speaker 4 42:46 Great. So, I mean another mandate that a lot of people don’t know about. Did you two know that starting next year if you have a hundred or more employees and you do not have a privately sponsored retirement plan, you now have to have one in place with the state of California? Yes. Leo, did you know that? I think you told me about it last week and I was blown away by this thing that’s been in the works for awhile. Correct. And you can actually start getting signed up July. How many employees? What’s the minimum threshold? This is the way they’re doing it right now. And remember we’re in California, so it’s subject to change. But basically if you, if you have a hundred or more employees starting by June 30th of next year, you have to have a plan in place. It’s going to be kind of like a Roth IRA for employees at the following year.
Speaker 4 43:31 2021 the threshold drops to 50 and then the magic number in 2022 is five five or more employees. You have to have your plan. You know, I just, I, I’m always resistant to more regulation, but I have to say this is one of them that I really think is good for our businesses, good for our communities. Um, and while I hate regulation because it’s just becomes more complex as we go. This is one of those that I think is really going to be good for our state on the long run. Yeah. And the employers honestly are going to have a lot of concern about it is lifted. It’s really going to fall more on the state. The employer doesn’t have to make a contribution, they don’t have to do a match. This is really more about the employee. Right. And I think that that’s important. And I think that this is what we oftentimes use businesses to, um, cover the cost of things to provide services for employees to do things for the community. We throw it in some form of a regulation or a tax or a fee on a business. Um,
Speaker 2 44:32 and this is going to be one of those that really is not going to hinder businesses to a terrible extent. It’s not going to weigh us down, but in the long run, I think this is going to be really good for our communities and it’s going to help people get in that lane of saving.
Speaker 4 44:47 Yeah. I run into is, you know, a 401k is not always the best fit for our business. There’s a lot of admin fees. A lot of employees these days don’t want to take advantage of them. They rather get the cash or other instruments you don’t have accepts and simple IRA. And once again, I work with financial advisors to help my clients. I try to do that. I stay out of it.
Speaker 2 45:07 I know that was the one benefit when we were, when we first started, um, the one thing that we said we want to provide even above and beyond paid vacation was um, uh, a retirement program where the employees can participate in it.
Speaker 4 45:20 This is so cool guys. I just got an email. Thank you Mike for the email. If you’re listening right now, he just said he loved the show and he needs to tighten up his payroll and he brought in these to talk to Josh. A thank you. A biweekly go Mike. Mike. Wow. So anyway, so thank you. Yeah. Uh, one thing I, one makes you do you do you bring uh, talk about is this whole credits, you know, you help there. So yeah. Types of credits that you help businesses sort of capitalize on top. There’s a credit out there called a work opportunity tax credit and basically it’s free money that the federal government wants to give business owners just like you guys. That sounds good. Um, the average credit for one employee that qualifies is $2,400 really? And the highest is 9,600. So just to give you an idea, like the three most popular buckets are someone that served in the military. Okay. If someone happens to be on food stamps, maybe somebody had a felony in the past and they’ve really wanted to get reenergized and recharged. So an employer gives them a second chance, the employer actually can benefit from that. The cool thing is it’s not a payroll credit. It’s actually a credit against their federal tax liability when they file their corporate tax return
Speaker 2 46:34 from the employee. No, none of them
Speaker 4 46:36 lawyer’s side. Yeah. The employee doesn’t get anything. This is an employer benefit because they’re the ones that are putting this employee in motion. Tell me more. Yeah, so the cool thing is, I mean we have a very nice uh, onboarding tool where instead of doing paper you can do everything online. So we send a welcome email to an employee through our system. They fill out everything electronically, their ID, all that can be taken, comes back to the employer and it drops right into our payroll system electronically at no cost. Watsi work opportunity tax credits. There’s a questionnaire there and they actually can take that to, and our system will identify if someone might be eligible, stats show us 20% of the U S workforce is eligible for a credit. Less than 1% of employers take advantage of the program. Just not knowing, not knowing. Number one administratively, it’s very burdensome.
Speaker 4 47:27 You have to go through a certification process with the state of California and it’s very, very detailed. If you don’t do it right, you can’t capture the credit. We have it down to a science. Awesome. Wow. Putting money back in the employer’s pocket. We don’t hear that. Very awesome. Quick story. I mean, I have a client that uses us for credit card processing and I called him about payroll and I said, Hey, what are you doing for Watts? You said, Oh um, we actually already do that. And we just got ours back from a couple of years ago, $400,000 in Watsi credits cause they had multiple hotels, restaurants. They really took advantage of it. But when, honestly when I talk to people, most people have never heard of it. Sometimes accountants don’t know what it is. I know. I mean there’s people you just don’t know. I didn’t. Yeah, I mean, you know, but what’s crazy is you may be even in your lane doing what you do, but there’s some specialties that you just can’t, you know, you don’t have the bandwidth and CPAs don’t have the bandwidth to capture everything. So you have to go with the specialists and get it right. Guess who our biggest competitor is? Who is that in house payroll. No more people do their own payroll than outsource really because they want them to two minutes. All right, so
Speaker 2 48:36 Sittard consider please causing a service to
Speaker 4 48:39 Claudine. Hey, ADA compliance. Can somebody talk to you about it?
Speaker 2 48:43 Absolutely. Please, please, please come talk to us. We can put you in touch with, um, a certified specialists that can come in and evaluate your property. We can really work with you to mitigate the potential damages that you know, that are everybody’s facing.
Speaker 4 48:58 Awesome. Well, we’ll, we’ll talk offline. So, um, uh, is there a business that is too small for, you know, uh, my sweet spot is one employee. I have a lot of one employee company, that S Corp owner, well the liability they face is really the same as a large business. It is a little bigger, but wipe out a wipe out. Correct. And I don’t, I don’t ever turn somebody down. If somebody said, Hey, I have, it’s just myself. I’m like, great. I have a lot of one employee copies. Our sweet spot is really one to the 250. We can do larger businesses, but depending on the solution they need, um, if they’re not the right fit, you know, I try to help them outside of that. Great. So, um, final thoughts. Um, so we talked about credit as we’ve talked about. Um, you are a partner with the business that you bring in your team of experts, whatever you go, correct.
Speaker 4 49:46 How can we reach you? How can you, somebody wants to do and talk to you. Where do they go, dude? Well, you can go, you can call me. Uh, okay. What’s your number? Where do, what can my number, I live in the Fresno area in the great city of Clovis, California. Uh, my numbers. Uh, so Josh, his number is five five nine three nine two two seven, five, nine, once again, (559) 392-2759 you can email me too. It’s [email protected]. But I’m here to serve the community. So whatever I can do to help people, a shout out to Heartland. Thank you. Reach out to us and we can also put you in touch with Josh. They go, we still want to reach you. You want to reach me? We’re
Speaker 1 50:28 interlock@areacodetwoohninefourtwoseventwentytwohundredatsharon-law.com and Greenland, the Greenland HQ, like the country of Greenland, and then HQ dot carb. Thank you so much for listening to the show. Have a great week. I hope you have fun. Have a great week. We’ll talk to you next week. Bye.

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