What changed in this filing

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Item 1. Business

2023-02-27 compared with 2022-03-14 · 53 added, 37 removed, 122 unchanged (42% of the section changed)

1 unchanged sentence

We offer the human resource (“HR”) tools necessary to build a thriving workforce, providing the resources to stay compliant with dynamic federal, state, and local tax jurisdictions and their respective labor laws, freeing cash flows so they can spend their financial capital on growing their businesses rather than administrative overhead that can impede growth.

Asure’s HCM suite (“AsureHCM”) includes Payroll & Tax, Human Resources, Time & Attendance software and HR services ranging from one-time projects to outsourcing payroll and HR staff entirely.

Our solutions also provide new ways for employers to connect with and to differentiate themselves with their employees in order to enhance their relationships with their talent.

Asure’s HCM suite (“AsureHCM”) includes Payroll & Tax solutions, HR compliance and services, Time & Attendance software and data integrations that enable employers and their employees to enhance efficiencies and take advantage of value-added solutions.

We offer these services directly and indirectly through our network of Reseller Partners.

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Approximately 15,000 of our clients are direct and the 85,000 remaining clients are indirect, as they have contracts with Reseller Partners who white label our solutions.

We strive to be the most trusted HCM resource to entrepreneurs.

We strive to be the most trusted HCM resource to SMBs.

We target less densely populated U.S.

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HR complexity, allocation of human and financial capital, and the ability to build great teams.

We have and will continue to invest in research and development to expand our solution.

AsureHCM, our user-friendly solution, reduces the administrative burden on employers and increases employee productivity while managing the employment lifecycle.

We were incorporated in 1985 as a Delaware corporation and our principal executive offices are located at 3700 N.

Capital of Texas Highway, Suite 350, Austin, Texas 78746.

We have and will continue to invest in research and development to expand our solutions.

Our solutions reduce the administrative burden on employers and increases employee productivity while managing the employment lifecycle.

We were incorporated in 1985 as a Delaware corporation and our principal executive offices are located at 405 Colorado Street, Suite 1800, Austin, Texas 78701.

Our telephone number is (888) 323-8835 and our website is www.asuresoftware.com.

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Asure Payroll & Tax is an integrated solution that provides a foundation for our clients’ digital HR strategy.

We automate and ensure compliance with the changing nature of regulations associated with payroll and taxes in all U.S.

We simplify payroll and automate and ensure compliance with the changing nature of regulations associated with payroll and taxes in all U.S.

jurisdictions—from wages, benefits, overtime, and garnishments to tips, direct deposits, the Fair Labor Standard Act and federal, state, and local payroll taxes.

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managed garnishments and employee self-service.

Human Resources.

Asure HR’s functionality handles HR complexities that SMBs face, including employee self-service so employees can access all their information (e.g., pay history and company documents).

With Asure HR’s dashboard, clients have convenient single-system access to every facet of the employment lifecycle including applicant tracking and employee on-boarding.

This solution improves benefits management by syncing to carriers and integrating with employee self-managed enrollment and life-event change adjustments.

Tax Management Solutions.

Asure provides innovative payroll tax processing software and service solutions for the payroll service industry, mid-market and large corporate employers.

With several scalable software and service options, from traditional full-service outsourcing to SaaS solutions, the extensive product line offers companies the ability to select a payroll tax solution that suits their needs.

Asure’s Tax Management solutions also support bulk filing and processing of Employee Retention Tax credits.

Human Resource Compliance.

Asure handles HR complexities that SMBs face, including employee self-service, applicant tracking, onboarding and compliance with federal, state and local regulations.

Asure provides three core levels of HR services:

(i) HR support, which provides an on-demand HR resource library, phone and email support for any HR issues and compliance and policy updates;

(ii) Strategic HR, which provides more in-depth support for strategic HR decision making;

and (iii) Total HR, which provides a complete HR outsourcing solution.

Time and Attendance.

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Finally, employees, supervisors and executives have real-time access to data and business intelligence to optimize labor costing, improve labor scheduling, and control labor costs.

Human Resource Services.

Asure provides three core levels of HR services:

HR support, which provides an on-demand HR resource library, phone and email support for any HR issues and compliance and policy updates;

Strategic HR, which provides more in-depth support for strategic HR decision making;

and Total HR, which provides a complete HR outsourcing solution.

Data Integration.

Asure’s solutions enable data integration with related third-party systems, such as 401(k), benefits, and insurance provider systems.

Asure Marketplace.

AsureMarketplace™ automates interactions between our HCM systems with third-party providers to enhance efficiency, improve accuracy and to extend the range of services offered to employers and their employees.

Asure has developed a large set of pre-built applications that businesses can connect with and has developed integrations with partners to exchange capabilities and data.

These integrations enable businesses to communicate seamlessly and support a wide range of business-to-business and business-to-consumer applications.

Business applications can include income verification and earned wage access.

We are currently developing consumer applications and expect such applications to be a component of the marketplace in the future.

PRODUCT DEVELOPMENT

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Asure is particularly focused on developing product capabilities that involve the movement and reconciliation of money.

Planned enhancements to our Treasury Management software position, which we expect to leverage macro trends in the payroll industry including same-day-pay, pay advances, and employee payments in the currency of their choice – including crypto currencies.

We plan to enhance our Treasury Management software position, which we expect to leverage macro trends in the payroll industry including same-day-pay, pay advances, and employee payments in the currency of their choice – including crypto currencies.

We believe these money movement capabilities will also create new product opportunities similar to stored value cards and an “Asure Wallet” which may allow us to hold and invest larger sums of payroll funds for a longer period of time.

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Many providers continue to deliver legacy enterprise software, but there is increased competition in the delivery of HCM cloud-based solutions by other SaaS providers.

Competitors in the HCM market tend to fluctuate, however, Asure’s main competitors are ADP, Paychex, Kronos, Paylocity, Paycor, Paycom, Ceridian, Namely, and Gusto.

Primary competitors to Asure Time & Attendance include Kronos, Paychex, ADP and Time Simplicity.

Primary competitors to our standalone tax services are Ceridian and ADP.

Competitors in the HCM market tend to fluctuate, however, Asure’s main competitors are ADP, Paychex, UKG, Paylocity, Paycor, Paycom, Ceridian, Namely, and Gusto.

Primary competitors to Asure Time & Attendance include UKG, Paychex, ADP and Time Simplicity.

Primary competitors to our tax management solutions are Ceridian and ADP.

While Asure has the advantage of a flexible, easy to use, cloud-based SaaS-delivered solution that is affordable for SMBs and has a proven deployment methodology, Asure faces several competitive challenges:

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laws and regulations that apply to them, particularly in their capacity as employers under state and federal laws.

Failure to comply with existing laws or regulations or to anticipate and incorporate into our services new laws and regulations so that our services remain compliant, could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

Failure to comply with existing laws or regulations or to anticipate and incorporate new laws and regulations into our services to remain compliant could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

Data privacy and security of data is subject to strict regulatory oversight.

The laws governing the collection, processing and storage of personal and sensitive data differs between jurisdictions and differs based on the type of data collected.

The laws governing the collection, processing, and storage of personal and sensitive data differ between jurisdictions and differ based on the type of data collected.

We collect and process the personal and sensitive information of clients, clients of our Reseller Partners, employees of our clients and Reseller Partners, vendors, and our own employees.

Data that we process and store includes personally identifying information such as names, addresses, social security numbers, bank account information, and in the case of our time and attendance products, biometric data.

We are therefore subject to compliance obligations under federal, state and foreign privacy and data security-related laws.

For instance, in the United States, the Health Insurance Portability and Accountability Act of 1996, including the related security provisions, applies to our flexible spending account services.

In general, data that we process and store includes personally identifying information such as names, addresses, social security numbers, bank account information.

As part of our time and attendance products, data that we process and store includes biometric data.

We are, therefore, subject to certain compliance obligations under federal, state, and foreign privacy and data security-related laws.

For instance, in the United States, the Health Insurance Portability and Accountability Act of 1996, including the related data security provisions, applies to our flexible spending account services.

We are also subject to federal and state security, privacy, and security breach notification laws with respect to personal and sensitive data as defined under such laws.

Such state and federal laws include laws such as the California Consumer Privacy Act of 2018, as amended and the Illinois Biometric Information Privacy Act and rules and regulations promulgated under the Federal Trade Commission.

Additionally, Virginia and Colorado enacted data privacy laws in 2021 that will come into effect in January 2023 and July 2023, respectively.

These laws track significant portions of existing laws, but include differences that may or may not increase our compliance burden.

We have a small number of end user clients located in the European Union using our time and attendance software and accordingly, the EU’s General Data Protection Regulation applies to the collection, processing and storage of applicable sensitive and personal data.

In some instances, these laws provide for civil penalties for violations as well as private rights of action for data breaches or other violations of the law.

Other states, including Colorado, Connecticut, Virginia, and Utah, have recently enacted new data privacy laws.

The Virginia Consumer Data Protection Act became effective in January 2023.

The remainder of the new legislation becomes effective mid to late 2023.

These new laws track significant portions of existing laws but include differences that may or may not increase our compliance burden.

We have a small number of end-user clients located in the European Union using our time and attendance software.

Accordingly, the EU’s General Data Protection Regulation applies to the collection, processing, and storage of applicable sensitive and personal data.

In some instances, these laws provide for civil penalties for violations and private rights of action for data breaches or other violations of the law.

Moreover, enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations continue to increase.

The future enactment of more restrictive laws, rules, or regulations and/or future enforcement actions or investigations could have a materially adverse impact on the Company through increased costs or restrictions on our businesses, and noncompliance could result in regulatory penalties and significant legal liability.

Failure to comply with data privacy laws and regulations could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

Failure to comply with data privacy laws and regulations could have a materially adverse effect on our reputation, results of operations, or financial condition;

or have other adverse consequences.

As part of our payroll and payroll tax solutions, we move funds from clients’ accounts to employees, taxing authorities, and other payees.

Certain state regulators have recently expanded their interpretation of state money transmission and money service business statutes to include these standard payroll processing activities necessitating our registering in certain jurisdictions as a money transmitter.

We are licensed as a payroll processor in jurisdictions requiring licensing of payroll processors.

Our activities under these money transmission statutes are subject to the anti-money laundering and reporting provisions of The Bank Secrecy Act of 1970, as amended by the USAPATRIOT Act of 2000, including the know-your-client due diligence requirements and related reporting of suspicious activities to applicable authorities.

Over the past few years, a number of state regulators have expanded their interpretation of state money transmission and money service business statutes to include these standard payroll processing activities, necessitating our registering in certain jurisdictions as a money transmitter.

We are licensed as a payroll processor in jurisdictions requiring licensure of payroll processors.

We pursue licensure as a money transmitter in jurisdictions that require payroll processors to be licensed under state money transmission laws.

We are also planning to pursue money transmission licenses in jurisdictions that have not yet made a determination as to whether their money transmitter statutes apply to payroll processors.

Money transmission activities may be subject to anti-money laundering laws at the state and federal levels.

The applicable laws may include:

the anti-money laundering and reporting provisions of The Bank Secrecy Act of 1970, as amended by the USA PATRIOT Act of 2000, which apply to money services businesses, and all related laws and regulations, including the requirement to verify customer identification and report suspicious activities to applicable authorities.

Many of our solutions assist clients in complying with certain U.S.

laws and regulations that apply to them, particularly in the human resources and employment law areas such as wage payment laws, state payroll tax filing and reporting, employee onboarding, and compliance with the IRS rules governing employers including tax withholdings, payroll tax filing and the preparation of Form W-2.

Our HCM solutions help clients manage their compliance with other laws including.

Our solutions help clients meet their obligations as a plan sponsor under COBRA, and sponsor and administer compliant Flexible Spending Account Plans and compliant Consumer Health Care Plans such as Health Savings Accounts and Health Reimbursement Accounts.

Our HCM solutions assist clients with managing their compliance with other laws, including help to meet their obligations as a plan sponsor under COBRA;

sponsor and administer compliant Flexible Spending Account Plans;

and provide compliant Consumer Health Care Plans, such as Health Savings Accounts and Health Reimbursement Accounts.

Our Tax Management solutions also support bulk filing and processing of Employee Retention Tax credits, which is new legislation that is part of the CARES Act.

We have registered Asure Software® as a federal trademark with the U.S.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business