Worcester Business Journal

wbjournal.com | August 3, 2020 | Worcester Business Journal 19 There are two pandemics ravaging our nation, COVID-19 and the ongoing pandemic of racism. Both have devastated the lives of people of color and affected local economies. We have banded together as a community to support those impacted by COVID-19, and we have supported our local businesses to survive through this crisis. Yet, we have not begun to address the ongoing public health crisis racism perpetuates throughout our society and in our workplaces. Companies must confront racism systemically, ad- dressing the structural, cultural and social mechan- ics of their organizations. The current moment has the potential to be pivotal in addressing systemic racism if corporate leaders have the wherewithal to commit to the following strategies: 10) Commit: To addressing the injury done to employees of color through overt and microaggressions faced inside and outside of your organization. 9) Commit: To providing ongoing racial equity edu- cation for members of your board, executive team, and staff to better understand systemic racism and the opportunities for racial equity growth, develop- ment, impact, and advancement. 8) Commit: To equitable human resource practices to ensure you are addressing unconscious racial bias in hiring and corporate advancement. 7) Commit: To fostering a safer and more wel- coming workplace by implementing a no tolerance policy for racism. 6) Commit: To establishing a racial equity com- mittee of racially diverse employees who meet regularly with the CEO, providing granular feedback on racial equity initiatives, identifying company and industry specific actions addressing systemic racism; and self-accountability. 5) Commit: To speaking out. The default response by white people not directly impacted by racism is to remain silent and avoid talking about race for fear of being seen as racist. The CEO is responsible for conveying concern for all employees. 4) Commit: To affirming the rights of employees of color by providing space to come together for reflection and conversation. 3) Commit: To leaning in when approaching uncomfortable conversations about racism, and when your world views, positions, or advantages are questioned or challenged. 2) Commit: To accountability in taking a stand against racism. Articulate how progress is tracked and communicated throughout the company. 1) Building the capacity to be anti-racist takes commitment, time and hard work. Talking about racism is difficult, but necessary. Let us help. K N O W H O W Offsetting payroll taxes with R&D credits 10 1: E mployee performance metrics are values tracking how a team member is performing for a com- pany. Data points can vary, of course, depending on the industry and position. And some metrics are easier to quantify than others, especially when it comes to so skills like active listening. Here are points of consideration when it comes to capturing employee contributions. Benefits of performance metrics go beyond reviews. Reducing turnover is one of the many positives of having them in place, according to Robert Izquierdo in e Blueprint, e Motley Fool newsletter. "Without performance metrics, [employees] have no way to gauge if they're doing well," he writes. "When it's time for a performance evaluation, the lack of metrics conveys a feeling that review ratings and com- pensation increases are arbitrary. is leads to reduced morale and increased likelihood of turnover." Setting expec- tations, metrics also improve perfor- mance, he said. Align performance metrics with what your clients value. "ink about what employee behaviors are most valuable to your customers … Put that at the center of your measurement methodology," advises Jon Picoult at Hiring.Monster. com. Organizations suffer with poorly designed methodology, he said, for example: A service center measuring the speed with which staffers handle calls and then wonders why customers' issues aren't thoroughly resolved; a company putting too much importance on quar- terly sales targets as opposed to the long term, resulting in executives making short-sighted decisions; or manufac- turing firms measuring workers on production volume and then struggle with quality of finished goods. Consider metrics as management infrastructure. "I'd argue they're foun- dational," writes Forbes.com's Victor Lipman about employee performance metrics, helping managers. "Without them, how exactly do employees know what's expected of them? And how do exactly managers know what to manage to? It can easily dissolve into a 'he said-she said' guessing game – not the kind of rigor you want to bring to the management process." 1 0 T H I NG S I know about . . . Committing to standing against racism BY ALAN OSMOLOWSKI Special to the Worcester Business Journal W hile tax reform at the end of 2017, oen referred to as the Tax Cuts and Jobs Act, introduced many new changes for businesses, the research-and-development tax credit provides a way to reduce tax liabilities, oen saving companies hundreds of thousands. However, many companies aren't fully benefiting from the R&D credit because of common misconceptions about its applicability to their operations. It has been my experience oentimes early stage technology and life science companies without an income tax liability don't think they can get an immediate cash benefit from R&D tax credits. is is not the case. e Protecting Americans from Tax Hikes Act of 2015 created an opportunity for qualified small businesses to offset their contribution to payroll tax using federal R&D tax credits for up to five years. Key points: Businesses may use their R&D tax credits to offset payroll tax, providing they meet the following requirements: • Gross receipts for five years or less • Less than $5 million in gross receipts in the year the R&D credit is claimed • Qualifying research activities and expenditures • Stock is not publicly traded What is the maximum benefit? R&D tax credits are applied against quarterly payroll tax payments for up to five years. In any given year, a company can apply up to $250,000 against its contribution to the Social Security tax of 6.2% of each employee's salary. For example, a startup soware company claimed a $65,000 R&D tax credit on its 2019 federal return. is entire amount could be used to offset its payroll taxes in 2020. In another example, an early-stage biotech company claimed a $270,000 R&D tax credit in 2019. In this case, only $250,000 can be applied to payroll taxes in the current year; the remaining $20,000 would be used to offset ordinary income tax or could be carried forward to next year. How does it work? e payroll tax offset is available on a quarterly basis beginning in the first calendar quarter aer a taxpayer files its federal income tax return. First, a taxpayer should complete Form 6765 – Credit for Increasing Research Activities, and elect the payroll tax credit. e taxpayer then claims the payroll tax credit by completing Form 8974 – Qualified Small Business Payroll Tax Credit for Increasing Research Activities. is form must be attached to the quarterly payroll tax return, Form 941 – Employer's Quarterly Federal Tax Return. Any unused credits can be carried forward. Can the payroll tax offset be elected on an amended return? If a taxpayer had not previously elected the payroll tax credit but then submits an amended tax return, the taxpayer can claim the credit aer the date the amended return was filed, but cannot claim the payroll tax credit elected on the amended return in an earlier quarter. Here in the Worcester area, we're lucky to have a growing technology and life sciences industry. ese firms – especially those in the early stages – can continue on this trajectory by making the most of R&D tax credits. With more of these companies adding to the Worcester economy, we all benefit. Alan Osmolowski is a tax partner with blumshapiro in Worcester, where he leads the firm's technology and life sciences practice. He can be reached at aosmolowski@ blumshapiro.com. BY SUSAN SHALHOUB Special to the Worcester Business Journal By Maritza Cruz Maritza Cruz is director of Racial and Gender Equity at the YWCA Central Massachusetts. Reach her at mcruz@ywcacm.org. P E R F O R M A N C E M E T R I C S W W W

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