Customer Case Studies

Some of our customers. (And their issues.)

A Global Clothing Retailer

Concerned about state non-resident payroll audits carried out on other organizations, leadership of the company wanted to implement a policy and process to prioritize its compliance and protect itself from financial and operational risk to the organization.
  • Organization has a widespread workforce and locations across the United States.
  • Out-of-state travel by its employees and leadership is frequently required, due to operations and expansion.
  • Organization has multiple categories of employees (i.e. exempt, non-exempt) at varying levels of compensation.
  • Organization does not have state non-resident payroll regulation expertise in-house.
  • Organization has a centralized travel management company and travel data, but is unable to leverage that data for the purposes of identifying, in a timely manner, those travelers for whom an employer non-resident state payroll tax withholding is required.
  • Organization is unable to proactively communicate and support those travelers for whom non-resident state tax withholding is required, which concerns them as they do not want to create undue issues for their HR and payroll department.
  • Organization does not have internal payroll resources to produce non-resident state wage allocation reporting each payroll cycle, in a format that is acceptable by their existing payroll system.

Solution:

  • Blackspark leveraged its proprietary technology and expertise in state non-resident payroll regulations to plug directly into the organization’s existing HR and travel infrastructure.
  • Blackspark delivered an employer non-resident state tax withholding policy and plan based on management objectives.
  • Upon management approval, Blackspark connected its technology to the organization’s existing infrastructure to automate a payroll process encompassing: Travel data tracking requiring no action or change by traveling executives, proactive notification to affected travelers and fully vetted wage allocation reporting, tailored to the multiple payroll cycles and cut-off dates of the organization.

A U.S. Energy Company

With employees, customers and operations across multiple states, the organization was struggling to understand how their population of employees traveling out of state for business was creating employer payroll withholding non-compliance risk.
  • Growth at the company had resulted in a wider-spread workforce, customer base and increased business travel.
  • With more employees working out of state, the organization was concerned that payroll withholding in the home state of employees was not addressing their employer withholding obligations in the states to which their employees traveled.
  • The organization had large amounts of travel data, but no way to distill it into the answer their executive was looking for: Where and how much risk are we creating from non-compliance?

Solution:

  • Blackspark utilized its proprietary technology to integrate directly with the organization’s travel system.
  • The process took minutes for the customer and enabled Blackspark to analyze historic travel data across the organization for the past calendar year.
  • Blackspark leveraged their technology and algorithms to take into account the organization’s payroll and tax status across the U.S. and applicable state regulations for employer payroll withholding applicable to non-residents.
  • Blackspark then presented the results to the executive and addressed their key questions.
  • As a follow up, Blackspark provided a report summarizing the analysis.
  • The executive, payroll, IT and travel organization got answers they were looking for with ease and without disruption.

A Global Insurance Company

Multinational corporate customers requiring access to a group of key employees resulted in concern that travel by the organization’s key executives was creating payroll risk.
  • The owner of operations at the company had attended seminars and had, at her previous enterprise, dealt with the financial realities of incorrect payroll tax withholding from executive compensation.
  • With significant travel by key executives within the U.S. and internationally, the organization wanted to understand where and how they were creating risk and develop a process to address it.

Solution:

  • Blackspark took in the organization’s travel data on a no-names basis and plugged it into their proprietary technology to perform a global analysis of business traveler payroll risk.
  • Blackspark presented analysis to management, segregating U.S. domestic and international travel by executives that presented little to no-risk from that which presented high and material levels of financial risk.
  • A report summarizing the analysis was delivered to the organization’s CFO along with recommendations and a plan to address the issue going forward.
  • The organization obtained the data and strategic action plan they required.

A Global Financial Services Company

Employer payroll obligations in all states that levy personal income tax on wages and thousands of traveling employees is daunting for payroll.
  • The CFO at this very large customer had implemented a policy to comply with state-to-state employer payroll withholding obligations for employees who travel out of state.
  • The policy affects wages and deferred compensation.
  • Tracking and processing very large amounts of travel data within the timeline of the organization’s payroll process was incredibly challenging for the internal payroll team and traveling employees.
  • The CFO authorized the internal payroll team to acquire services to address the operational requirements of the policy.

Solution:

  • Blackspark was selected by the customer (over a Big 4 tax services firm) because its proprietary technology and services plug into the organization’s existing enterprise travel systems. Blackspark also passed the customer’s rigorous IT security review and were flexible enough to support the policy in place at the organization.
  • Because the organization had gone through the process of executing this payroll compliance internally, they had already learned that:
    • Synchronization of historical employee travel data is required.
    • Employee travel data needs to be collected and analyzed as early as possible (i.e. as travel is booked).
    • Employees on business travel would prefer to have as little involvement as possible with business traveler payroll compliance (i.e. “I book corporate travel in accordance with company policy, so you already have all the data you need from me. If my travel does not affect my existing payroll withholding, please don’t bother me.”)
    • Employees also don’t like surprises (i.e. “If my payroll withholdings could be affected because of my travel, please give me a heads-up and allow me to confirm that data before anything is processed.”)
    • Payroll requires wage allocation reports in a specific format and on a specific schedule (i.e. “I need a report that can be accepted by our existing payroll system. Each wage allocation report should take into account our payroll calendar, changes or confirmation by the employee, should not have wages allocated to states with no income tax, should take into account state reciprocity and should reflect non-resident state withholding thresholds specified in our policy. Most importantly, it needs to be delivered accurately before our cut-off date.”
  • Blackspark’s proprietary technology and services best addressed the complex requirements of the organization.

A Global Technology Services Firm

The organization’s expanding international projects required tracking and controls to ensure employer payroll and tax compliance for the countries in which they do business.
  • The organization’s expanding international projects required employees from multiple countries to travel and deliver services to customers.
  • The CFO and HR leadership mandated maintaining good standing in new markets, including compliance with payroll and tax reporting obligations from their business traveler activity.
  • The HR team, line managers and organization’s tax service provider analyzed travel, project and employee data to monitor and identify payroll and tax issues to be addressed.
  • The process was time consuming and costly – so company HR investigated alternate solutions to address their requirements.

Solution:

  • Blackspark was selected because their proprietary technology and services removed all manual effort and provided reporting tailored to the organization’s needs, namely:
    • Country-specific dashboards classifying and identifying travelers approaching or exceeding key international thresholds.
    • International wage allocation reporting.
    • Project-level reporting specific to corporate tax organization monitoring key metrics required by organization’s tax service provider.
  • The process is transparent to travelers and the travel organization.
  • What was once a painful task is now done in minutes: “It has been a life-saver for us.”

A Public Manufacturing Company

Audited for business traveler state payroll non-compliance.
  • This organization was under review over multiple years for payroll non-compliance in respect of non-resident employees on business travel into the state in which the organization is headquartered.
  • The financial exposure to the company was from employer failure to withhold state income tax in respect of regular wages and deferred compensation earned by employees who are non-resident in the state, but travel to and/or have earnings borne from employment exercised in the state.
  • The company finance team had HR, payroll and travel data and wanted a system to process it immediately to understand their exposure and deliver a control to eliminate it going forward.

Solution:

  • Blackspark was engaged because their proprietary technology and services met the substantial IT security and personally identifiable information protection governance standards of the organization and integrated with the travel data infrastructure in place at the company.
  • In less than 2 days, years of historical data was analyzed and presented to the executive.
  • A summary of the analysis, estimated exposure and plan to address the issue going forward was delivered immediately following the presentation from Blackspark.
  • The above was achieved with minimal effort by the organization, no disruption to employees on business travel and within the timeline mandated.
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Cliffs Natural Resources

Cliffs had recently acquired a large mining company in Eastern Canada and also significantly advanced their projects in the Ring of Fire region of Northern Ontario. This increased international presence was indicative of the organization’s diversification strategy. It had therefore become even more important for senior management to be able to see the impact of the company’s activities from a worldwide perspective.
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Case Studies was last modified: May 17th, 2017 by admin