What is the purpose of this document?

The purpose of this document is to act as a knowledge base for any Payroll, Benefits, or Justworks related questions.

The original purpose of this document was to record why we believe we should select Justworks as our Payroll and Benefits provider. This document will simplify and omit certain details for the sake of communication, but the intention is to provide a comprehensive view into all the factors that led to our decision, so that we can move forward with our registration process.

How often do we run payroll?

We run payroll twice a month, once on the 15th and once on the last day of the month, or on it’s closest business day.

Background on Justworks

<aside> 💡 On Tues. Oct 27, we decided to use Justworks for our payroll and benefits. Justworks gives employees access to more benefits (vision & dental), and offers health insurance at a lower cost ($150+ per month vs $300+ per month from Oscar). All in, Justworks saves us ~$1,000 per year per employee over using Rippling for payroll and signing up for Oscar insurance.

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What problem were we trying to solve in choosing Justworks?

Understanding the problem is always a good place to start when evaluating our decisions. In order for us to be a successful company, and build our software product, we need to hire employees. Having employees means we need to pay them salaries on a regular basis, less any payroll taxes, which need to be paid to the government. Benefits (health insurance, 401k’s) also require reductions from payroll in order to function and be legally compliant. As a company grows, and interacts with other government programs (e.g. Affordable Care Act, COBRA), the payroll process becomes increasingly complex, increasingly scrutinized by the government, and increasingly at risk of breaking a law that we may or may not be aware of. As a company hires more employees, it becomes cost-effective to hire a person to solely manage the payroll and benefits process. For a company of any size running payroll, it is extremely common to use a payroll software, due to the low cost of these tools and clear ROI of having machines disburse regular payments, automate deductions, and remit tax filings, vs error-prone individuals who may not have HR expertise. This is the problem we need to solve: we need to pay and administer benefits to our employees in a way that scales as we hire while minimizing our costs and risks to the business.

Why not hire contractors? Or not offer benefits?

We could only hire contractors but, not to belabor the point (or the pun), we believe its important for businesses to provide Good Jobs. While we know that the Good Jobs strategy was conceived for retail workers, and that the Good Jobs strategy is not just about benefits or W2 status and rather our operational choices and investments in people, I wanted to take the time to state this clearly: We believe healthcare is a right not a privilege. Almost 10 million Americas have lost health insurance due to COVID-19. Providing job security and health benefits is what makes entrepreneurship a noble, virtuous act. We are building a company as much for ourselves, as we are for the world around us, and the world we want it to become. A company that does not reflect our values, that does not provide good jobs and health benefits to those who work for it, is not worth building.

How did we evaluate our options?

There are generally two models for payroll and benefits for a company our size:

Co-employment with a Professional Employment Organization (PEO) who outsources your HR function, and buys benefits at discounted rates for all companies in their group.