8 unchanged sentences
See “Forward-Looking Information” in Item 7 of Part II of this report and “Risk Factors” in Item 1A of Part I of this report.
+Added: Common Stock Split
+Added: On June 4, 2024, we amended our Charter to increase the number of authorized shares of common stock from 20,500,000 shares to 82,000,000 shares, and our Board of Directors declared a four-for-one split of the Company’s common stock effected in the form of a stock dividend (the “2024 Stock Split”).
+Added: Each stockholder of record at the close of business on June 14, 2024 received a dividend of three additional shares of common stock for each then-held share, distributed after close of trading on June 21, 2024.
+Added: All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the 2024 Stock Split.
+Added: The shares of common stock retain a par value of $0.01 per share.
+Added: Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from additional paid-in capital to common stock.
Business Strategy
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The decentralized structure fosters autonomous decision-making in which business teams deliver plans that closely align with the objectives of each business owner client.
−Removed: We support clients with a local presence in 68 markets throughout the United States.
Services Overview
BBSI’s core purpose is to advocate for business owners, particularly in the small and mid-sized business segment.
−Removed: Our evolution from an entrepreneurially run company to a professionally managed organization has helped to form our view that all businesses experience inflection points at key stages of growth.
+Added: Our evolution from an entrepreneurially run company to a professionally managed organization
+Added: has helped to form our view that all businesses experience inflection points at key stages of growth.
The insights gained through our own growth, along with the trends we see in working with more than 8,100 companies each day, define our approach to guiding business owners through the challenges associated with being an employer.
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We work to manage and reduce job injury claims, identify fraudulent claims and structure optimal work programs, including modified duty.
−Removed: In 2023, BBSI began offering employee benefit programs to our clients.
−Removed: The employee benefit programs are designed to provide strategic value to our clients through access to best-in-class plans and service.
−Removed: Benefit plans available to clients include medical, dental and vision plans, flexible spending accounts and health savings accounts, life insurance and voluntary accident coverage, critical illness and disability coverage, among others.
+Added: In 2023, BBSI began offering additional employee benefit programs to our clients.
+Added: The new benefit programs available to clients include medical, dental and vision plans, flexible spending accounts and health savings accounts, life insurance and voluntary accident coverage, critical illness and disability coverage, among others.
+Added: These additional employee benefit programs are offered through fully insured arrangements with third-party carriers and are designed to provide strategic value to our clients through access to best-in-class plans and service.
Categories of Services
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See Item 7 of Part II of this Report for information regarding the percentages of total net revenues provided by our PEO and staffing services for each of the last three fiscal years, and our consolidated financial statements in Item 8 of Part II of this Report for information regarding revenues, net income and total assets in our single reportable segment.
−Removed: We enter into a client services agreement to establish a co-employment relationship with each client company, assuming responsibility for payroll, payroll taxes, workers’ compensation and benefits coverage (if elected) and certain other administrative functions for the client’s existing workforce.
+Added: We enter into a client services agreement to establish a co-employment relationship with each client company, assuming responsibility for payroll, payroll taxes, workers’ compensation (if elected) and benefits coverage (if elected) and certain other administrative functions for the client’s existing workforce.
We provide our PEO clients access to human resource advisors, retirement plans, a learning management system and our web-based technology platform, myBBSI.
3 unchanged sentences
Staffing and Recruiting
−Removed: Our staffing services include on-demand or short-term staffing assignments, contract staffing, direct placement, and long-term or indefinite-term on-site management.
+Added: Our staffing services include on-demand or short-term staffing assignments, contract staffing, direct placement (including for PEO and non-PEO clients), and long-term or indefinite-term on-site management.
On-site management employees are BBSI management employees who are based on the client-site and whose jobs are to assist BBSI staffing employees.
Our recruiting experts maintain a deep network of professionals from which we source candidates.
−Removed: Through an assessment process, we gain an understanding of the short and
−Removed: long-term needs of our clients, allowing us to identify and source the right talent for each position.
+Added: Through an assessment process, we gain an understanding of the short and long-term needs of our clients, allowing us to identify and source the right talent for each position.
We then conduct a rigorous screening process to help ensure a successful hire.
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It is nevertheless possible that claims not satisfied or covered through indemnification or insurance may be asserted against us, which could adversely affect our results of operations.
−Removed: We have PEO client services agreements with a diverse array of customers, including electronics manufacturers, various light-manufacturing industries, agriculture-based companies, transportation and shipping enterprises, food processors, telecommunications companies, public utilities, general contractors in various construction-related fields, restaurant franchises, and professional services firms.
−Removed: None of our clients individually represented more than 1% of our total revenues in 2023.
+Added: We have PEO client services agreements with customers in a diverse array of industries, including, among others, construction, manufacturing, transportation and warehousing, waste management and remediation services, retail, leisure and hospitality and wholesale trade.
+Added: None of our clients individually represented more than 1% o f our total revenues in 2024 .
Market Opportunity
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It is in the mutual interests of the client and BBSI to commit to workplace safety and risk mitigation.
−Removed: We maintain clear guidelines for our area managers and risk management consultants, directly tying their continued employment to their diligence in understanding and addressing
−Removed: the risks of accident or injury associated with the industries in which client companies operate and in monitoring clients’ compliance with workplace safety requirements.
+Added: We maintain clear guidelines for our area managers and risk management consultants, directly tying their continued employment to their diligence in understanding and addressing the risks of accident or injury associated with the industries in which client companies operate and in monitoring clients’ compliance with workplace safety requirements.
Elements of Workers' Compensation System
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Approximately 85% of the Company’s workers’ compensation exposure is covered through the insured program.
−Removed: Effective July 1, 2021, the Company entered into a new arrangement for its insured program, whereby third-party insurers assumed all risk of loss for claims incurred from July 1, 2021 to June 30, 2022 (the “2021-2022 Policy”).
−Removed: The arrangement for the insured program was extended for claims incurred from July 1, 2022 to June 30, 2023 (the “2022-2023 Policy”) and for claims incurred from July 1, 2023 to June 30, 2024 (the “2023-2024 Policy”).
−Removed: The 2021-2022 Policy, 2022-2023 Policy, and 2023-2024 Policy allow for premium adjustments depending on overall policy performance.
−Removed: If claims develop favorably, BBSI can participate in savings up to $20.0 million, $22.5 million, and $28.5 million for the 2021-2022 Policy, 2022-2023 Policy, and 2023-2024 Policy, respectively.
−Removed: If claims develop adversely, additional premium may be charged up to $7.5 million under the 2021-2022 Policy.
−Removed: No additional premiums may be charged if claims develop adversely under the 2022-2023 Policy and the 2023-2024 Policy.
+Added: Effective July 1, 2021, the Company entered into a fully insured arrangement for its insured program, whereby third-party insurers assume substantially all risk of loss for claims incurred under the program.
+Added: This fully insured arrangement has been extended annually and covers claims incurred between July 1, 2021 and June 30, 2025, with an option to renew through June 30, 2026.
+Added: Each annual fully insured policy allows BBSI to participate in savings if claims develop favorably up to a maximum per policy year ranging from $20.5 million to $28.5 million, depending on the policy period.
+Added: For only the policy period from July 1, 2021 to June 30 2022, BBSI can also incur additional premium up to $7.5 million if claims develop adversely.
+Added: No additional premium can be charged based on claim performance for other policy years.
+Added: Premiums incurred but not paid are recorded as either current or long-term premium payable on the consolidated balance sheets based on the expected timing of the payments.
For claims incurred under the insured program prior to July 1, 2021, the Company retains risk of loss up to the first $3.0 million per occurrence on policies issued after June 30, 2020 and $5.0 million per occurrence on policies issued before that date.
−Removed: On June 29, 2020, the Company entered into a loss portfolio transfer agreement (“LPT 1”) to remove all outstanding workers’ compensation claims obligations for claims incurred under its insured program between February 1, 2014 and December 31, 2017.
−Removed: On June 30, 2021, the Company entered into a loss portfolio transfer agreement (“LPT 2”) to remove all remaining outstanding workers’ compensation claims obligations for client policies issued under its insured program up to June 30, 2018.
+Added: Claim obligations for policies issued under the insured program between February 1, 2014 and June 30, 2018 were removed through loss portfolio transfers in 2020 and 2021.
Self-Insured Programs
−Removed: The Company is a self-insured employer with respect to workers' compensation coverage for all employees, including employees of PEO clients that elect to participate in our workers’ compensation program, working in Colorado, Maryland and Oregon.
+Added: The Company is a self-insured employer with respect to workers' compensation coverage for all employees, including employees of PEO clients that elect to participate in our workers’ compensation program, working in Colorado, Maryland, Ohio, and Oregon.
In the state of Washington, state law allows only the Company's staffing services and internal management employees to be covered under the Company's self-insured workers' compensation program.
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Human Capital
−Removed: At December 31, 2023, we had 130,513 total employees, including 126,446 WSEs under our PEO client service agreements, 3,224 staffing services employees, 839 managerial, sales and administrative employees (together, “management employees”), and 4 executive officers.
−Removed: The number of employees at any given time may vary significantly due to business conditions at customer or client companies.
+Added: At December 31, 2024, we had a total of 3,658 employees, including 870 managerial, sales and administrative employees (together, “management employees”), 4 executive officers and 2,784 staffing services employees.
+Added: We are also the administrative employer for certain limited purposes such as processing payroll and remitting payroll taxes for 132,069 WSEs in our co-employment arrangements with our PEO clients.
+Added: The number of employees and WSEs at any given time may vary significantly due to business conditions at BBSI and our client companies.
We believe our employee relations with management employees are good.
BBSI believes that making significant investments in the best management employee talent available allows us to leverage the value of this investment many times over.
−Removed: Additionally, we believe our Company’s success depends on our ability to attract, develop and retain our workforce.
+Added: Additionally, we believe our Company’s success depends on our ability to attract, develop and retain our management employee and staffing workforce.
As such, we strive to be an employer of choice and promote the health, welfare and safety of our employees.
This involves promoting diversity and treating all employees with dignity and respect, while providing our management employees with fair, market-based, competitive and equitable compensation.
+Added: Because of our continuous commitment to our employees, we have recently been recognized as a Great Place to Work Certified company for our fourth consecutive year.
We motivate our management employees through a compensation package that includes a competitive base salary and the opportunity for profit sharing.
At the branch level, profit sharing is in direct correlation to client WSE growth and workers’ compensation claims performance, reinforcing a culture focused on achievement of client goals.
−Removed: We also provide a comprehensive benefits package as well as an employee stock purchase plan.
+Added: We also provide a comprehensive benefits package as well as an employee stock purchase plan to our employees.
We seek feedback from employees regarding our benefits package through employee surveys.
This information is used by management to make improvements as we continuously strive to be an employer of choice.
−Removed: We offer various qualified employee benefit plans to our employees, including those employees for whom we are the administrative employer in a co-employment arrangement with a PEO client that so elects.
−Removed: Employees covered under a PEO arrangement may participate in our 401(k) plan at the sole discretion of the PEO client.
+Added: We offer various qualified employee benefit plans to our employees and WSEs for whom we are the administrative employer in a co-employment arrangement with a PEO client that so elects.
Our qualified staffing and management employee benefit plans include our 401(k) plan.
Beginning in 2023, qualified employees may enroll upon reaching 21 years of age and completing six months of service.
−Removed: We make matching contributions to the 401(k) plan under a safe harbor provision, which are immediately 100% vested.
We match 100% of contributions by management and staffing employees up to 3% of each participating employee's annual compensation and 50% of the employee's contributions up to an additional 2% of annual compensation.
+Added: Matching contributions to the 401(k) plan for management and staffing employees are made under a safe harbor provision, which are immediately 100% vested.
+Added: WSEs covered under a PEO arrangement may participate in our 401(k) plan at the sole discretion of the PEO client.
We also offer a cafeteria plan under Section 125 of the Internal Revenue Code and group health, life insurance and disability insurance plans to qualified staffing and management employees.
2 unchanged sentences
Under the plan, participants are permitted to defer receipt for income tax purposes of up to 90% of salary and up to 100% of any incentive bonus.
−Removed: Participants earn a return on their deferred compensation based on investment earnings of participant-selected investments.
+Added: Participants earn a return on their deferred compensation based on the investment performance of participant-selected investments.
As an incentive to participate in the plan, the Company awards restricted stock units with a value equal to 35% of the amount deferred under the plan, up to a maximum of $75,000 per year.
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Because each PEO client is considered to be the sole employer in the application of any rule or law included within the scope of the Acts, we are not required to offer health care coverage to the WSEs of our PEO clients.
−Removed: However, in 2023 we began offering sponsored benefits, including healthcare coverage, to eligible PEO client employees as part of our PEO service offering.
+Added: However, in 2023 we began offering
+Added: sponsored benefits, including healthcare coverage, to eligible PEO client employees as part of our PEO service offering.
To comply with the employer mandate provision of the Acts for our staffing and management employees, we offer health care coverage to all staffing and management employees eligible for coverage under the Acts.
Regulatory and Legislative Environment
−Removed: We are subject to the laws and regulations of the jurisdictions within which we operate, including those governing self-insured employers under the workers' compensation systems in Oregon, Maryland, and Colorado, as well as in Washington for staffing and management employees.
+Added: We are subject to the laws and regulations of the jurisdictions within which we operate, including those governing self-insured employers under the workers' compensation systems in Oregon, Maryland, Ohio, and Colorado, as well as in Washington for staffing and management employees.
We are also subject to laws and regulations governing our two wholly owned insurance companies in Arizona.
11 unchanged sentences
Additional Information
−Removed: Our filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and registration statements, as well as any amendments to these filings, are accessible free of charge at our website at http://www.bbsi.com as soon as reasonably practicable after they are electronically filed with the SEC.
+Added: Our filings with the Securities and Exchange Commission ("SEC"), including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and registration statements, as well as any amendments to these filings, are accessible free of charge at our website at http://www.bbsi.com as soon as reasonably practicable after they are electronically filed with the SEC.
By making this reference to our website, we do not intend to incorporate into this report any information posted on our website.
5 unchanged sentences
Our ability to continue our business operations under our present service model is dependent on maintaining workers' compensation insurance coverage.
−Removed: Our arrangement with fully licensed, third-party insurers under the insured program provides workers’ compensation coverage to BBSI’s PEO clients through June 30, 2024, with committed coverage through
−Removed: June 30, 2024, and the possibility of additional annual renewals.
+Added: Our arrangement with fully licensed, third-party insurers under the insured program provides workers’ compensation coverage to BBSI’s PEO clients through June 30, 2025, with the possibility of additional annual renewals.
If our fully licensed third-party insurers are unwilling or unable to renew our arrangement in the future, we would need to seek coverage from a small number of alternative insurers.
39 unchanged sentences
Additionally, as our employees may work from home more frequently and access the Company's systems remotely, the Company may be exposed to heightened security risks, including the risk of cyber-attacks.
−Removed: The methods and techniques used by cyber threat actors to gain entry into our network and access our computer systems, software and data will become more advanced with the use of artificial intelligence and may become increasingly difficult or impossible to detect and prevent.
+Added: The methods and techniques used by cyber threat actors to gain entry into our network and access our computer systems, software and data will become more advanced with the use of artificial intelligence ("AI") and may become increasingly difficult or impossible to detect and prevent.
As these threats continue to evolve, we may be required to invest significant additional resources to modify and enhance our information security and controls or to investigate and remediate any security vulnerabilities.
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Any loss of confidence arising from a significant data security breach could hurt our reputation, further damaging our business.
+Added: Our business may be materially affected – either positively or negatively – by the emergence of disruptive new technologies or approaches enabled by the rapid pace of innovation unfolding in the artificial intelligence space.
+Added: The safe and responsible integration of AI functionality as it rapidly evolves presents emerging ethical and legal challenges, and the use of such technologies may result in diminished brand trust and reputational harm.
+Added: As with many innovations, AI presents risks and challenges that could significantly disrupt our business model.
+Added: In addition, the use of AI by bad actors presents increasingly complex and sophisticated security threats to our confidential customer, employee, and Company data, and we must make additional efforts to maintain network security.
+Added: The regulatory landscape surrounding AI technologies is evolving, and the ways in which these technologies will be regulated by governmental authorities, self-regulatory institutions, or other regulatory authorities remains uncertain and may be inconsistent from jurisdiction to jurisdiction.
+Added: Certain jurisdictions in which we operate are considering or have proposed or enacted legislation and policies regulating AI and non-personal data, such as the recent Executive Order on AI.
+Added: Such regulations may result in operational costs to modify, maintain, or align our business practices, or constrain our ability to develop, deploy, or maintain these technologies.
Other Risks Related to our Business and Industry
New service offerings may subject us to additional risks.
−Removed: In August 2022, BBSI announced its plans to make certain fully insured medical and other health and welfare benefits available to qualifying worksite employees beginning in 2023.
−Removed: This new service offering, as well as other potential future service offerings, may introduce additional risks and uncertainties to our business.
+Added: Future new service offerings may introduce additional risks and uncertainties to our business.
Our efforts to implement new services may place substantial additional demands on our employees, as well as our information systems and technology platforms.
2 unchanged sentences
New service offerings, including health care benefits, may also introduce additional legislative and regulatory requirements with which we are not familiar, or from which we are currently exempt.
−Removed: Violation of such laws and regulations could subject us to fines, penalties, and damages, damage our reputation, constitute a breach of our client agreements, impair our ability to obtain and renew required licenses, and
−Removed: decrease our profitability or competitiveness.
+Added: Violation of such laws and regulations could subject us to fines, penalties, and damages, damage our reputation, constitute a breach of our client agreements, impair our ability to obtain and renew required licenses, and decrease our profitability or competitiveness.
If any of these effects were to occur, our operating results and financial condition could be materially adversely affected.
15 unchanged sentences
Additionally, weak economic conditions may result in higher unemployment, which is correlated with increased workers’ compensation claims.
−Removed: The spread of a highly infectious or contagious disease, and the response by federal, state, and local government agencies, including preventative actions taken such as shelter-in-place orders, restrictions on travel, temporary closures of businesses deemed to be high-risk or non-essential, and other government mandates, could create significant economic disruption that results in a material reduction in business operations, such as occurred during the COVID-19 pandemic.
−Removed: As our PEO fees are based on client payroll, workforce reductions or shortages related to a future pandemic could have a material adverse effect on our business.
+Added: The spread of a highly infectious or contagious disease, and the response by federal, state, and local government agencies, including preventative actions taken such as shelter-in-place orders, restrictions on travel, temporary closures of businesses deemed to be high-risk or non-essential, and other government mandates, could create significant economic disruption that results in a material reduction in business operations.
Clients who are impacted by government restrictions and economic disruptions may experience liquidity and other financial issues, which may reduce their capacity to pay for our services.
+Added: Additionally, trade policies, including tariffs or other import restrictions, may increase costs for our clients, particularly those reliant on global supply chains.
+Added: Higher input costs due to tariffs could lead our clients to reduce payroll expenses, delay hiring, or cut jobs, which could negatively impact our revenue.
+Added: Supply chain disruptions caused by trade restrictions may also result in business slowdowns or closures, further affecting our ability to grow and retain clients.
These factors could have a material adverse effect on our results of operations and financial condition.
+Added: Our business depends on reliable access to labor, which may be affected by economic conditions, government policies, and public health crises.
+Added: Our PEO and staffing revenue is based on client payroll, and our business growth depends on the availability of a sufficient and stable workforce for our clients.
+Added: The availability of labor may be affected by various factors, including, among others, economic conditions;
+Added: demographic trends, including outmigration from states in which we operate;
+Added: government policies on immigration;
+Added: and public health crises.
+Added: The spread of highly infectious diseases can reduce workforce participation due to illness, quarantine requirements, or caregiving responsibilities.
+Added: Economic downturns or shifts in labor market dynamics can impact workforce participation rates and overall labor availability.
+Added: Additionally, changes in government administrations can result in shifts in immigration policies, which may affect our clients’ ability to recruit and retain workers.
+Added: Stricter visa requirements, limitations on work permits, delays in processing, or reductions in visa allocations could lead to labor shortages, particularly in industries that rely on immigrant labor, such as agriculture, construction, and hospitality.
+Added: Businesses that depend on seasonal labor, including those utilizing temporary work visa programs, may be especially vulnerable to such changes.
+Added: Any of these factors could adversely impact our business and financial performance.
Our staffing business is vulnerable to economic fluctuations.
4 unchanged sentences
We generally assume credit risk associated with our clients’ employee payroll obligations, including liability for payment of salaries and wages (including payroll taxes), as well as retirement benefits.
−Removed: These obligations are fixed whether or not the client makes payments to us as required by our services agreement.
+Added: These obligations are fixed whether or not the client makes payments to us as required by our services
We attempt to mitigate this risk by invoicing our clients at the end of their specific payroll processing cycle.
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If we experience significant incidents involving any of the above-described risk areas, we could face substantial out-of-pocket losses, fines or negative publicity.
−Removed: In addition, such claims may give rise to litigation, which may be time consuming, distracting and costly, and could have a material adverse effect on our business.
+Added: In addition, such claims may give rise to
+Added: litigation, which may be time-consuming, distracting and costly, and could have a material adverse effect on our business.
With respect to claims involving our co-employer relationships, although our client services agreement provides that the client will indemnify us for any liability attributable to the conduct of the client or its employees, we may not be able to enforce such contractual indemnification, or the client may not have sufficient assets to satisfy its obligations to us.
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The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “Acts”) subject us to potential penalties unless we offer our employees minimum essential healthcare coverage that is affordable.
−Removed: To comply with the employer mandate provision of the Acts, we offer health care coverage to all temporary and permanent employees eligible for coverage under the Acts other than employees of our PEO clients, which are responsible for providing required health care coverage to their employees.
+Added: To comply with the employer mandate provision of the Acts, we offer health care coverage to all temporary and permanent employees eligible for coverage under the Acts other than employees of our PEO clients, which are responsible for providing required
+Added: health care coverage to their employees.
Designating employees as eligible is complex and is subject to challenge by employees and the Internal Revenue Service (“IRS”).
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Potential future acquisitions may introduce several risks related to the integration of businesses, personnel, product lines, and technologies.
−Removed: If we are unable to successfully identify appropriate acquisition candidates, negotiate favorable terms, and successfully integrate an acquisition, our business, financial condition, and results of operation could be materially and adversely affected.
+Added: If we discover compliance or regulatory issues after an acquisition, encounter greater than anticipated costs and/or use of management time associated with evaluating potential acquisitions and integrating acquired businesses into our operations, or are unable to successfully identify appropriate acquisition candidates, negotiate favorable terms, and successfully integrate an acquisition, our business, financial condition, and results of operation could be materially and adversely affected.
Risks Related to Our Regulatory Environment
−Removed: Failure to appropriately interpret and comply with COVID-19 relief programs could materially adversely affect our business, reputation, results of operations and financial condition.
−Removed: In response to the pandemic, federal and state government agencies have enacted numerous laws and regulatory guidelines designed to help the economy, individuals and employers.
−Removed: Many of these legislative and regulatory programs, including the CARES Act and the American Rescue Plan Act, directly impact the Company and our clients.
−Removed: The guidance surrounding these programs can be limited and has evolved over time.
−Removed: Failure to appropriately interpret and comply with legal and regulatory requirements arising from the COVID-19 pandemic could harm client relationships and result in fines, penalties, and legal or regulatory action, which could have a material adverse effect on our business and reputation.
−Removed: Several of these programs, including the Employee Retention Tax Credit ("ERC"), use payroll tax credits or deferrals as the mechanism to provide benefits to small businesses and employees.
−Removed: As such, when clients and former clients wish to utilize these programs, the associated tax forms must be filed through the PEO, which creates additional administrative effort for the PEO.
−Removed: Because of this process, IRS review of our clients may further result in administrative effort for BBSI.
−Removed: Additionally, determining eligibility for programs such as ERC is complex and is based on company-specific data that PEOs do not possess for their clients.
−Removed: If the IRS denies any of our clients' claims or deems clients who have received ERC through BBSI ineligible, and if the IRS or our clients attempt to hold BBSI liable for these amounts, this could have a material adverse effect on our business, results of operation and financial condition.
+Added: Failure to interpret and comply with applicable federal and state payroll tax and unemployment tax laws could materially adversely affect our business, reputation, results of operations and financial condition.
+Added: As the administrative employer in our co-employer relationships with our clients, we are subject to a complex and evolving set of federal, state and local payroll tax laws and regulations, including requirements related to withholding, reporting and remitting payroll taxes on behalf of our clients.
+Added: Compliance with these laws requires significant resources, and failure to comply with payroll tax laws in any jurisdiction in which we operate could subject us to financial penalties, interest charges and other liabilities.
+Added: Additionally, our clients may be eligible for various legislative and regulatory programs, including those established under the CARES Act and the American Rescue Plan Act, such as the Employee Retention Tax Credit (“ERC”), which use payroll tax credits or deferrals as the mechanism to provide benefits to small businesses and employees.
+Added: When clients and former clients wish to utilize these programs, the associated tax forms must be filed through the PEO, which creates additional administrative effort for the PEO.
+Added: Additionally, determining eligibility for these programs is complex and is based on company-specific data that PEOs do not possess for their clients.
+Added: If the IRS determines that clients who received payroll tax credits through BBSI are ineligible, and if the tax authorities or our clients attempt to hold BBSI liable for these amounts, this could have a materially adverse effect on our business, reputation, results of operation, and financial condition.
We operate in a complex regulatory environment, and failure to comply with applicable laws and regulations could adversely affect our business.
11 unchanged sentences
Changes in government regulations may result in restrictions or prohibitions applicable to the provision of employment services or the imposition of additional licensing, regulatory or tax requirements.
−Removed: Our business is heavily regulated in most jurisdictions in which we operate.
−Removed: We cannot provide assurance that the states in which we conduct or seek to conduct business will not:
+Added: Our business is heavily regulated, and we cannot provide assurance that regulatory authorities in jurisdictions in which we conduct or seek to conduct business will not:
• impose additional regulations that prohibit or restrict employment-related businesses like ours;
11 unchanged sentences
These regulations may restrict our ability to operate these companies in the manner we believe is best, which could increase the cost of our operations, restrict our access to insurance coverage or adversely affect our liquidity.
+Added: Increasing regulatory focus on privacy and security issues and expanding laws and regulatory requirements could impact our business models and expose us to increased liability.
+Added: We are subject to national data protection, privacy and security laws, and regulations that relate to our various business units and data processing activities, which may include sensitive, confidential, and personal information.
+Added: These laws, regulations and codes may be inconsistent across jurisdictions and are subject to evolving and differing (sometimes conflicting) interpretations.
+Added: Government officials and regulators, privacy advocates and class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data.
+Added: This scrutiny can result in new and shifting interpretations of existing laws, thereby further impacting our business.
+Added: State laws on privacy, data and related technologies create additional privacy and security compliance obligations and expand the scope of potential liability.
+Added: The dynamic and evolving nature of these laws, regulations and codes, as well as their interpretation by regulators and courts, may affect our ability to implement our business models effectively and to adequately address disclosure requirements.
+Added: Perception of our practices and services, even if unfounded, as a violation of individual privacy, data protection rights or cybersecurity requirements, may subject us to public criticism, lawsuits, investigations, claims and other proceedings by regulators, industry groups or
+Added: other third parties, all of which could disrupt or adversely impact our business and reputation and expose us to increased liability, fines and other punitive measures.
Risks Related to Ownership of our Common Stock
17 unchanged sentences
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.