Category: Workforce Compliance Trends

Every summer, companies across the country bring on interns to support operations, develop future talent, and strengthen their workforce pipeline. While internship programs can provide value, they also create administrative challenges for employers — especially when it comes to payroll, onboarding, workers’ compensation, compliance, and HR management. That is why many businesses choose to partner with a trusted third-party payroll provider for summer interns.

Simplify Internship Hiring Without Adding Administrative Burden

Hiring interns may seem straightforward, but managing payroll and employment responsibilities internally can quickly become time-consuming. Employers must handle:

• Payroll processing
• Tax withholding
• Workers’ compensation coverage
• I-9 and employment verification
• W-2 processing
• Unemployment insurance
• HR compliance requirements
• Timekeeping and reporting

Companies can focus on developing and mentoring their interns while the third party payroll (3PP) partner handles the administrative employment responsibilities.

Reduce Risk and Improve Compliance

Internship programs often involve temporary employees working for only a few months. Even short-term or part-time hires still require full employment compliance. Misclassification issues, payroll errors, and incomplete onboarding documentation can create unnecessary risk for employers.

Utilizing a 3PP/employer of record for interns, helping businesses:

• Ensure compliant onboarding
• Employing remote workers in all 50 states where the company may not be licensed/registered
• Properly process payroll taxes
• Maintain workers’ compensation coverage
• Handle employment documentation
• Reduce HR and payroll liability exposure

This allows companies to maintain a professional and compliant internship program without overwhelming their internal HR team.

Faster Onboarding for Summer Hiring

Many organizations hire large groups of interns within a short timeframe. Internal HR departments may struggle to onboard dozens of seasonal employees quickly and efficiently.

Streamline the process with:

• Fast onboarding procedures
• Electronic paperwork
• Payroll setup
• Timekeeping support
• Dedicated staffing and payroll coordination

This helps interns get started faster and allows managers to focus on training and productivity rather than administrative delays.

Cost-Effective Workforce Flexibility

Using a third-party payroll partner can also help companies better manage workforce costs during seasonal hiring periods. Instead of increasing internal payroll administration for a temporary summer program, employers can outsource staffing expertise.

This is especially beneficial for:

• Corporate internship programs
• Manufacturing facilities
• Distribution and logistics companies
• Administrative support teams
• Project-based summer staffing needs
• College recruitment initiatives

Better Experience for Interns and Managers

A successful internship program depends on organization, communication, and a positive onboarding experience. Payroll delays or administrative confusion can negatively impact employee satisfaction.

Create a smooth experience by providing:

• Clear web-based onboarding support
• Reliable payroll processing
• Professional HR assistance
• Responsive communication
• Accurate timekeeping and pay administration

This helps companies maintain a strong employer brand while delivering a professional experience for interns entering the workforce.

A Trusted Partner for Flexible Workforce Solutions

As businesses continue seeking flexible workforce solutions, third-party payroll partnerships have become an increasingly popular option for internship and seasonal hiring programs.

3PP solutions provides employers with the flexibility, compliance support, and administrative expertise needed to successfully manage summer interns while reducing internal workload and employment risk.

For companies planning upcoming internship programs, partnering with an experienced staffing and payroll provider can help ensure a more efficient, compliant, and successful summer hiring season.

Remember that most recent potential customer phone call, email, or website response requesting temporary staffing help.  Did it sound too good to be true?  Maybe it was too good to be true.  Scammers are continuing to target the staffing industry in all shapes and forms.  They can disguise themselves as a real person at a real company.  Their website, phone numbers and emails may seem legitimate, but all those communications route to a scammer/imposter.  Their common goal is to steal payroll funds and unemployment claim benefits.  The result can be very costly and traumatic to the staffing firm.  There are ways to defend your organization. Learn more at this webinar presented by the Florida Staffing Association. Webinar presented by experts, UNIFORCE Staffing Solutions, Fox Rothschild and Seacoast Financial.

Watch the Webinar: Beware of Employment Agency Scammers

Presenters

Scott Schnierer, UNIFORCE Staffing Solutions

Diane Geller, Fox Rothschild

Heather Ries, Fox Rothschild

Kevin Henry, Seacoast Financial

Remember that most recent potential customer phone call, email, or website response requesting temporary staffing help.  Did it sound too good to be true?  Maybe it was too good to be true.  Scammers are continuing to target the staffing industry in all shapes and forms.  They can disguise themselves as a real person at a real company.  Their website, phone numbers and emails may seem legitimate, but all those communications route to a scammer/imposter.  Their common goal is to steal payroll funds and unemployment claim benefits.  The result can be very costly and traumatic to the staffing firm.  There are ways to defend your organization. Learn more at this webinar presented by UNIFORCE Staffing Solutions, Fox Rothschild and Seacoast Financial.

Webinar: Beware of Employment Agency Scammers

When: 3/4/2026 12:00 PM – 1:00 PM

Where: Virtual Meeting – Join meeting link will be provided later.

Presenters

Scott Schnierer, UNIFORCE Staffing Solutions

Diane Geller, Fox Rothschild

Heather Ries, Fox Rothschild

Kevin Henry, Seacoast Financial

Sign up for the webinar.

Effective Jan 1, 2025, employees working in the state of New Jersey will see some positive changes with regards to higher pay, but conversely higher payroll deductions such as temporary disability insurance and family leave insurance.

At the beginning of this year, the statewide minimum wage increased by $.36 to $15.49 per hour for most employees.

When Governor Murphy took office in 2018, the state’s minimum wage was $8.60 per hour, and increasing the minimum wage was quickly identified as a legislative priority. Legislation signed by Governor Murphy in February 2019 resulted in the gradual increase of the State’s minimum hourly wage to $15.13 on January 1, 2024 for most employees.

The NJ Department of Labor and Workforce development has announced changes to its required Temporary Disability Insurance program, and a premium increase for Family Leave Insurance (FLI) in New Jersey. After waiving the employee contribution for TDI in 2023 and 2024, the New Jersey labor board is reinstating the employee contribution rate at 0.23%, with a maximum employee contribution of $380.42 per year. Employer contributions are based on a taxable wage base of $43,300, up from $42,300 in 2024. Along with the rate increase, the maximum weekly benefit is going up from $1055 in 2024 to $1081 in 2025. The maximum benefit percentage remains at 85% of the employee’s average weekly wage.

Additionally, the New Jersey State Insurance Fund (NJSIF) has increased the employee contribution rate for Family Leave Insurance to 0.33%, a substantial jump from 0.09% in 2024.

FLI pays the same benefit as temporary disability in New Jersey, with the benefit maxing out at $1,081 weekly. FLI is available for New Jersey employees who need time off to care for or bond with an infant or a newly adopted or foster child within the first 12 months, care for any family member with a serious health condition, or deal with issues of domestic violence.

Additionally, to be eligible for Unemployment Insurance benefits in 2025, one must have earned at least $303 per week during 20 or more weeks in covered employment during the base year period, or one must have earned at least $15,200 in total covered employment during the base year period.

For many organizations, managing unemployment claims can be a challenging and costly process, particularly when dealing with specific categories of workers like retirees, temporarily terminated employees, and 1099 independent contractors. Misclassification or improper documentation for these groups can lead to unnecessary unemployment claims expenses. By outsourcing the “employee of record” function to a third-party payroll provider, businesses can minimize these claims, reduce administrative burdens, and gain more control over unemployment-related costs. Here’s how this strategic partnership benefits organizations:

1. Clear Employment Boundaries for Temporary Layoffs and Recalls

When employees are temporarily terminated and later recalled, there can be confusion around their eligibility for unemployment benefits. Third-party payroll providers, acting as the new employee of record, handle these employment transitions with precision. By on-boarding recalled employees and becoming the employer of record, this minimizes the likelihood of unemployment claims from recalled employees. The burden has been passed on to the provider.

2. Accurate Classification and Documentation for Retirees

Handling retirement transitions is another area where mistakes can lead to avoidable unemployment claims. Bring back a retiree without the full time status commitment and payroll burden. Third-party payroll providers, acting as the new employee of record, can also reduce the unemployment burden by handling these employment transitions.

3. Ensuring Compliance with Unemployment Regulations through 1099-to-W-2 Conversions

Misclassifying 1099 independent contractors as employees can lead to significant compliance issues, including unexpected unemployment claims. Third-party payroll providers help ensure that workers who should be classified as employees are converted from 1099 to W-2 status, bringing businesses into compliance with unemployment and tax regulations. This conversion provides clarity around eligibility, as W-2 employees are entitled to unemployment benefits if they meet the necessary criteria, whereas properly classified 1099 contractors are not. By proactively managing these employee conversions, third-party payroll providers help organizations avoid potential fines, penalties, and costly claims due to misclassification, while maintaining full compliance with state and federal employment laws.

4. Comprehensive Record-Keeping for Contractors, Retirees, and Temporarily Laid-Off Employees

Maintaining thorough documentation is crucial for contesting unemployment claims, particularly for retirees, contractors, and employees in temporary or flexible roles. Third-party payroll providers manage accurate and consistent records, from classification documents to proof of temporary status. These records are invaluable for contesting ineligible claims, ensuring an organization only pays what is necessary.

5. Reduced Claims and Administrative Burden on HR Teams

When handling unemployment claims for retirees, recalled employees, or 1099 contractors, the administrative workload can be substantial. Things get even more complicated when handling multi-state payroll. A third-party payroll provider can alleviate this burden, freeing up an HR team to focus on strategic initiatives rather than navigating the claims process. By reducing HR’s administrative tasks, payroll providers help streamline operations and minimize errors that could lead to unnecessary claims.

6. Predictable Costs and Better Control Over Unemployment Expenses

Third-Party Payroll providers can become the employer of record for either a specific job title classification or workforce by as specific Work State. By reducing the number of unemployment claims and ensuring accurate classification and documentation, third-party payroll providers give better control over potential unemployment expenses, making State Unemployment Insurance (SUI) financial planning more consistent.

Conclusion

Outsourcing the employee of record function to a third-party payroll provider can help an organization reduce unemployment claims related to retirees, recalled employees, and 1099 contractors. With their expertise in documentation, classification, and compliance, payroll providers can ensure that only eligible workers receive unemployment benefits, ultimately protecting businesses from unnecessary expenses. Partnering with a payroll provider allows cost management more effectively and focus on core business goals.

As the 2024 election approaches, many small and midsized businesses are delaying hiring due to uncertainty over possible new presidential policies affecting the business sector, such as changes in tax laws, healthcare regulations, and labor policies. Combined with economic uncertainty, high interest rates, and tight budgets, companies are understandably cautious about increasing staff and headcount in an unpredictable environment. But what if there was a way to maintain operational efficiency through hiring without the long-term commitment of adding permanent employees?

This is where third-party payroll solutions can be a game-changer. By partnering with a staffing firm or employment agency that provides third-party payroll solutions, businesses can still access top-quality talent while keeping headcount low and budgets under control.

Recruit the talent and let the staffing firm handle the payroll.

Third-party payroll Solutions offer businesses the flexibility to recruit and bring on skilled employees without officially adding them to headcount as an actual W-2 employee. The client sources and recruits the talent, while the staffing official hires those referred employees as a W-2. The staffing firm charges a low markup percentage over the hourly employee gross pay rate designated by the client. Here’s how it can benefit a business in a challenging uncertain economy:

1. Keep Headcount Low, Maintain Productivity: With third-party payroll, the employees technically work for the staffing firm, allowing a company to manage headcount and minimize the impact on payroll. Since many CFOs analyze headcount on a monthly basis, this helps maintain essential operations without the long-term financial commitment of permanent full time hires.
2. Access Skilled Talent Now, Hire When Ready: Even though hiring is on hold for many companies, there’s no reason to miss out on top-tier skilled candidates. With third-party payroll, clients can bring on qualified employees to help operations grow now, and when the economy stabilizes or budget allows, seamlessly transition them into full-time employees. The good news is that there are no conversion fees to convert these employees back to the client’s W-2 payroll.
3. Minimize Administrative Burden: The administrative tasks involved in managing payroll, taxes, and compliance can be overwhelming, especially when budgets are tight and teams are lean. Third-party payroll solutions handles all payroll taxes and compliance, allowing HR and the internal management team to focus on core business operations. A staffing firm can offer paid sick leave, ACA complaint health benefits, and 401(k) retirement plans (with a safe harbor employer match) to eligible employees.

The Benefits of Third-Party Payroll Solutions During Economic Uncertainty:

• Cost Control: Recruit skilled workers without the full financial commitment of adding them to W-2 payroll right away.
• Flexibility: Scale workforce up or down as needed, based on the business situation, without worrying about layoffs or compliance headaches. There are also no unemployment claims expenses or management. The third party payroll solutions provider handles the employee off-boarding & compliance.
• Reduced Risk: In uncertain times, third-party payroll solutions mitigates the risks associated with full-time hiring, offering flexibility without sacrificing talent.

Conclusion: Stay Agile with Third-Party Payroll Solutions in an Uncertain Economy

When there is economic uncertainty as well as an upcoming election, some businesses put their hiring needs on hold. This is not necessarily the optimal solution for a company with enterprise wide growth plans that include hiring employees. But with third-party payroll solutions, a company can maintain operations running smoothly while preparing for growth when the time is right. This managed solution gives companies access to qualified talented employees now, with the flexibility to bring them on full-time once the headcount or budget increases.

Since 1951, the state of New Jersey has required that any employment agency, headhunter, consulting firm or home health agency operating as a business in the state register with the Division of Consumer Affairs. Over the years, the state has not actively enforced compliance or registration to the thousands of firms that conduct operations in New Jersey. Not until the New Jersey Temporary Worker Bill of Rights was enacted in late 2023, has the state fully ramped up its audit of staffing firms and mandated the enforcement of employer registration.

According to the Division of Consumer Affairs, “any person who operates a business that employs individuals directly or indirectly for the purpose of assigning the employed individual to assist the firm’s customers in handling work loads” is required to register as a licensed temporary help service firm. In doing so, the state is monitoring New Jersey temporary employment agency unfair trade practices.

A company, hospital, or medical practice that works with an employment agency should verify that its temporary help employment agency vendor or partner is registered with the state. A client that works with only a registered staffing firm has a measure of protection and compliance. The state requires employment agency compliance with regards to insurance, financial charters/ownership, as well as legal documentation. It also monitors company complaints and violations.

Any company can verify if a temporary help employment agency is registered with the state of New Jersey by clicking on the New Jersey Division of Consumer Affairs Search Tool.

Temporary employment agencies that fail to register and comply with the state face the following potential violations and penalties.

• Being requried to refund payments made from clients
• Being required to pay reasonalbe attoreney fees for any ligitaion
• Being required to pay a $2,000 penalty for the intiail violation and a $5,000 penalty for every subseuqent fiolation
• The revocation of a New Jersey corporate charter

Since people are the most important asset to any organization, it’s important to partner with a stable and licensed employment agency that provides its own employees according to state guidelines. Why risk working with a temporary employment agency where its greatest assets can be taken away?

A law signed earlier this year to protect temporary workers in New Jersey has fully taken effect on August 5th, 2023.

The legislation, known as the Temporary Workers’ Bill of Rights, expands the rights and protections to only very specific labor categories of temporary workers – allowing for greater oversight of temporary help service firms and third-party clients by the New Jersey Department of Labor and Workforce Development  and the Division of Consumer Affairs. It was enacted by Gov. Phil Murphy in February.

Some examples of those labor categories include:

• Food preparation
• Construction
• Protective Services / Security

Some provisions of this law were effective May 7, 2023, while other provisions including record keeping and transportation were effective on August 5, 2023. The notice of rule proposal has been published on the NJ Department of Labor & Workforce Development.

Bringing on summer interns is a great way for an organization to get help and mentor a student with a passion for the industry. It may also let managers take that much needed vacation. One consideration that companies don’t realize is that summer interns need to be paid a fair hourly wage according to federal and state payroll tax guidelines. Basically, interns must be treated as employees and added to a company’s full time staff payroll. You can’t get something for nothing.

Even when organizations realize that they have to pay to play, they still hesitate to use summer interns because they must now officially hire the employee and add to staff payroll. This reality can frustrate the CFO and Human Resources department due to the fact that summer interns who are directly employed will add to the overall company’s headcount. The employment of interns can also complicate monthly full time employee (FTE) census reports. The impact could cost throw off discrimination testing for retirement plans, add additional payroll processing costs, and simply just increase employee risks and exposure with regards to workers compensation insurance premiums.

A popular strategy to remove the employer and employee relationship is to refer the summer interns to an employment agency that specializes in third party payroll solutions. With this practice, the summer interns can still be on boarded, but they become the employee of the employment agency. The employee or intern is simply transferred to the employment agency and the agency takes on the official employer of record. The employment agency will also become the W-2 employer and deduct state and federal taxes as well as insure the employee (workers compensation and professional liability).

A responsible third party payroll solutions firm is aware of the compliance issues, co-employment loopholes, workers compensation insurance risks, and payroll laws. When selecting a third party payroll solutions partner, select a provider that is financially solvent. After all, the employment agency is extending payroll on your company’s behalf. They are required to pay the employee on a weekly payroll cycle no matter what happens. Also, inquire about the employment agency’s employee benefits offerings. Health benefits and 401(k) retirement plans will increase summer intern retention if applicable. Some employment agencies offer a 401(k) employer match. A great way to retain interns.

Overall, summer interns are a great way to maintain succession planning and office productivity. An easy way to get the payroll process going smoothly and quickly is to partner with an employment agency that specializes in third party payroll solutions. Why not let your trusted payroll specialist and advisor handle the compliance?