How Jessica Solved 'Chaotic' Payroll Tax Compliance

State Payroll Tax Compliance Background

• Jessica Krane - VP of People @ FloatMe

• States with remote employees: 18

Tell us about FloatMe

At FloatMe, we provide individuals loans to get them to their next paycheck, small loans, whether it's to get gas, groceries, or pay bills. Members can get, manage, and save money - all in one place

Money is very emotional. Whether or not a person feels like they have enough money is a highly personal thing.

While one person is thinking about "what stocks should I buy today?" the next person is thinking about “do I have enough money to get to work today?”

FloatMe is an awesome company. I absolutely love the team. I love our founder. I've previously been on the side of FinTech where I was helping people get really, really wealthy.

And now I love being on the side where I'm helping everyday Americans achieve prosperity and be able to give to their family.

Describe why you love your role

I have to say, and this will sound really cliche, it's the team. 

We have focused on building a safe and brave space, and I really truly believe our team feels that we’ve succeeded there. 

For example, we did something yesterday called Let's TacoAbout It, and we spoke about Asian American Pacific Heritage Month and Jewish American Heritage Month and Mental Health Awareness Month. 

We had a Talk About Black History Month. We don't just look at things on the surface, we really appropriately dig deeper and support each other.

And we’ve seen the results. Our NPS score went from 8.1 to 45.2 to 54, and then last quarter, our NPS score was an 82.

A lot of times when asked similar questions about how they did it, people will say “oh, we improved our benefits. We gave bonuses.”

I wouldn't say we have the strongest benefits out there.

I would say it's the camaraderie we've built, and I would say it's really focusing on our team and building that safe and brave space where everyone can show up as their genuine self.

We also are very focused on career progression and not just saying “hey, you could be promoted to this next title” but instead “ what do you need to do to get there?”

And the last thing I’d say is, it's just really the culmination of our progress. You know, it always feels good to see what products are being released and are being used by people in need. 

Our engineers and our product team, not that that makes up the entire team, are building a product that’s really unique and something we’re all really, really excited about.

We speak a lot about how it’s mission driven. We're not building products that WE want to build, we're building products to help the people, our members. We don't even call them our users, they're our members. 

So yeah it's been a lot of work, but a lot of fun.

What words would you use to describe managing state payroll tax compliance manually?

I’d say chaotic and bewildered.

It feels so chaotic keeping track of when annual reports are due or what information is needed, and bewildered about what are they asking us for, why do they need this, why are they asking for it 6,000 times in different places.

And what a lot of times it's like, we've been paying this. Why isn't it going through anymore? What happened?

And I would say another is  anxiety of, hey, are we in compliance or we not in compliance right now?

So I think that was a big one for me that would wake me up at night being like, oh my gosh, you know, is this payment going through? Are we registered here? 

We have a new employee joining in Arizona or wherever, are we good? Are we set up? Is the new hire paperwork filed through Gusto? And on and on.

What’s been the impact of using AbstractOps to eliminate those feelings?

I think the biggest impact for me is just knowing it's handled. It's definitely not my area of expertise.

I'm not a traditional VP of people that has deep, deep HR experience. Most of my background is recruiting, but a lot of more ops has come into my roles in the past few years. 

I would say knowing it's covered, knowing work in compliance and we're not going to get a nasty gram email saying, “Hey, you haven't paid this, you now owe $600 for this XYZ reason.”

Tactically, what have you found most helpful using AbstractOps?

I think automating annual reports has been super helpful.

On new hires, we hired four people pretty in line, some in new states, so automating registration was definitely one.

Something else that really helped was knowing that we should deregister from a state, so we're not still paying if we don't have anyone there, and what happened was we ended up deregistering one of them, and then hiring someone in that state and being like, oh, man, like, do we have to start from the beginning? 

But that workflow is so easy just being like “you just need XYZ and you'll be back in good standing.”

So I would say the new hire states, because we had some new states we've never had, the annual reports and just like the one off monthly, here's a notice you're getting, no idea what this means, but AbstractOps tells me what it means.

How important is state compliance assistance when considering HR tools, such a payroll provider?

I would rate it pretty high now knowing how much work goes into compliance and what the impact was taking it off.

So I would say it would be pretty high on my evaluation criteria.

I would almost maybe consider it a deal breaker if we were looking at a different payroll platform from our current one. 

It's a beast.

Additional notes from the AbstractOps team

We’ve been observing more and more comments from folks like Jessica, who have expressed that integrated state compliance could be a differentiating factor when choosing an HR solution such as a payroll provider. 

Why has this been coming up more and more recently? 3 hypotheses:

1. Companies have finally settled on their post-pandemic remote work strategy and are now evaluating whether their existing HR technology stack aligns.

2. Knowing that remote is largely here to stay, states have gotten more vigilant enforcing requirements like foreign qualification and levying penalties.

3. Attempting to run as lean as possible, fewer companies have dedicated teams for state compliance, and rather, lump this critical activity onto someone’s - HR, accounting, or even founders’ -  already full plate.

If you’re any of the people in that last bullet, there is an easier way, consider using a solution like AbstractOps to automate registrations and annual reports, centralize state notices and registered agent requirements, and take control of compliance risks.

If you’re curious, start the product demo here.