Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 08, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36373 | ||
Entity Registrant Name | TRINET GROUP, INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 95-3359658 | ||
Entity Address, Address Line One | One Park Place, | ||
Entity Address, Address Line Two | Suite 600 | ||
Entity Address, City or Town | Dublin, | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94568 | ||
City Area Code | 510 | ||
Local Phone Number | 352-5000 | ||
Title of 12(b) Security | Common stock par value $0.000025 per share | ||
Trading Symbol | TNET | ||
Security Exchange Name | NYSE | ||
Entity Well Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3.6 | ||
Entity Common Stock, Shares Outstanding (in shares) | 50,567,866 | ||
Documents Incorporated by Reference | Portions of the Registrant’s Definitive Proxy Statement to be issued in connection with its Annual Meeting of Stockholders, scheduled to be held on May 23, 2024, are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0000937098 | ||
Document Year Focus | 2023 | ||
Document Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | DELOITTE & TOUCHE LLP |
Auditor Location | San Francisco, California |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Total revenues | $ 4,922 | $ 4,885 | $ 4,540 |
Costs and operating expenses: | |||
Insurance costs | 3,513 | 3,463 | 3,339 |
Cost of providing services | 307 | 303 | 264 |
Sales and marketing | 285 | 242 | 202 |
General and administrative | 211 | 241 | 176 |
Systems development and programming | 65 | 73 | 50 |
Depreciation and amortization of intangible assets | 72 | 64 | 54 |
Total costs and operating expenses | 4,453 | 4,386 | 4,085 |
Operating income | 469 | 499 | 455 |
Other income (expense): | |||
Interest expense, bank fees and other | (40) | (39) | (20) |
Interest income | 72 | 22 | 6 |
Income before provision for income taxes | 501 | 482 | 441 |
Income taxes | 126 | 127 | 103 |
Net income | 375 | 355 | 338 |
Other comprehensive (loss) income, net of income taxes | 3 | (4) | (5) |
Comprehensive income | $ 378 | $ 351 | $ 333 |
Net income per share: | |||
Basic (in dollars per share) | $ 6.61 | $ 5.66 | $ 5.13 |
Diluted (in dollars per share) | $ 6.56 | $ 5.61 | $ 5.07 |
Weighted average shares: | |||
Basic (in shares) | 57 | 63 | 66 |
Diluted (in shares) | 57 | 64 | 67 |
Professional service revenues | |||
Total revenues | $ 756 | $ 754 | $ 639 |
Insurance service revenues | |||
Total revenues | $ 4,166 | $ 4,131 | $ 3,901 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 287 | $ 354 |
Investments | 65 | 76 |
Restricted cash, cash equivalents and investments | 1,269 | 1,263 |
Accounts receivable, net | 18 | 19 |
Unbilled revenue, net | 447 | 375 |
Prepaid expenses, net | 67 | 71 |
Other payroll assets | 381 | 122 |
Other current assets | 44 | 46 |
Total current assets | 2,578 | 2,326 |
Restricted cash, cash equivalents and investments, noncurrent | 158 | 153 |
Investments, noncurrent | 143 | 151 |
Property and equipment, net | 17 | 24 |
Operating lease right-of-use asset | 24 | 31 |
Goodwill | 462 | 462 |
Software and other intangible assets, net | 172 | 163 |
Other assets | 139 | 133 |
Total assets | 3,693 | 3,443 |
Current liabilities: | ||
Accounts payable and other current liabilities | 87 | 98 |
Revolving credit agreement borrowings | 109 | 0 |
Client deposits and other client liabilities | 65 | 106 |
Accrued wages | 515 | 437 |
Accrued health insurance costs, net | 175 | 174 |
Accrued workers' compensation costs, net | 50 | 54 |
Payroll tax liabilities and other payroll withholdings | 1,438 | 1,087 |
Operating lease liabilities | 14 | 15 |
Insurance premiums and other payables | 10 | 17 |
Total current liabilities | 2,463 | 1,988 |
Long-term debt, noncurrent | 984 | 496 |
Accrued workers' compensation costs, noncurrent, net | 120 | 128 |
Deferred taxes | 13 | 8 |
Operating lease liabilities, noncurrent | 30 | 41 |
Other non current liabilities | 5 | 7 |
Total liabilities | 3,615 | 2,668 |
Commitments and contingencies (see Note 9) | ||
Stockholders' equity: | ||
Preferred stock, ($0.000025 par value per share; 20,000,000 shares authorized; no shares issued or outstanding at December 31, 2023 and 2022) | 0 | 0 |
Common stock and additional paid-in capital, ($0.000025 par value per share; 750,000,000 shares authorized; 50,664,471 and 60,555,661 shares issued and outstanding at December 31, 2023 and 2022, respectively) | 976 | 899 |
Retained earnings (Accumulated deficit) | (896) | (119) |
Accumulated other comprehensive loss | (2) | (5) |
Total stockholders' equity | 78 | 775 |
Total liabilities & stockholders' equity | $ 3,693 | $ 3,443 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.000025 | $ 0.000025 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000025 | $ 0.000025 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 50,664,471 | 60,555,661 |
Common stock, shares outstanding (in shares) | 50,664,471 | 60,555,661 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock and Additional Paid-In Capital: | Retained Earnings (Accumulated Deficit): | Accumulated Other Comprehensive (Loss) Income: |
Beginning balance at Dec. 31, 2020 | $ 607 | $ 747 | $ (144) | $ 4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock from exercise of stock options | 1 | |||
Issuance of common stock for employee stock purchase plan | 10 | |||
Repurchase of common stock | (94) | |||
Stock based compensation expense | 50 | |||
Net income | 338 | 338 | ||
Awards effectively repurchased for required employee withholding taxes | (26) | |||
Other comprehensive (loss) income | (5) | (5) | ||
Ending balance at Dec. 31, 2021 | 881 | 808 | 74 | (1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock from exercise of stock options | 1 | |||
Issuance of common stock for employee stock purchase plan | 10 | |||
Issuance of common stock for the acquisition of Zenefits | 17 | |||
Repurchase of common stock | 1 | (524) | ||
Stock based compensation expense | 62 | |||
Net income | 355 | 355 | ||
Awards effectively repurchased for required employee withholding taxes | (24) | |||
Other comprehensive (loss) income | (4) | (4) | ||
Ending balance at Dec. 31, 2022 | 775 | 899 | (119) | (5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock from exercise of stock options | 4 | |||
Issuance of common stock for employee stock purchase plan | 11 | |||
Repurchase of common stock | (1,122) | |||
Stock based compensation expense | 62 | |||
Net income | 375 | 375 | ||
Awards effectively repurchased for required employee withholding taxes | (30) | |||
Other comprehensive (loss) income | 3 | 3 | ||
Ending balance at Dec. 31, 2023 | $ 78 | $ 976 | $ (896) | $ (2) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | |||
Net income | $ 375 | $ 355 | $ 338 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of intangible assets | 72 | 64 | 54 |
Amortization of deferred costs | 40 | 38 | 31 |
Amortization of ROU asset, lease modification, impairment, and abandonment | 9 | 25 | 12 |
Stock based compensation | 59 | 62 | 50 |
Accretion of discount rate on lease liabilities | 2 | 2 | 2 |
Provision for doubtful accounts | 3 | 2 | 0 |
Deferred income taxes | 5 | (22) | (9) |
Losses from disposition of assets | 1 | 6 | 0 |
Losses and impairment on investments | 1 | 18 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (2) | 0 | 3 |
Unbilled revenue, net | (72) | (51) | (78) |
Prepaid expenses, net | 4 | (2) | (5) |
Other payroll assets | (259) | (72) | 10 |
Accounts payable and other current liabilities | (8) | (13) | 33 |
Client deposits and other client liabilities | (40) | 9 | (37) |
Accrued wages | 77 | 65 | 60 |
Accrued health insurance costs, net | 1 | 0 | 2 |
Accrued workers' compensation costs, net | (12) | (8) | (7) |
Payroll taxes payable and other payroll withholdings | 351 | 158 | (166) |
Operating lease liabilities | (17) | (17) | (13) |
Other assets | (38) | (55) | (60) |
Other liabilities | (7) | (2) | (2) |
Net cash provided by operating activities | 545 | 562 | 218 |
Investing activities | |||
Purchases of marketable securities | (276) | (410) | (444) |
Proceeds from sale and maturity of marketable securities | 286 | 469 | 349 |
Acquisitions of property and equipment and projects in process | (75) | (56) | (40) |
Acquisitions of subsidiaries, net of cash acquired | 0 | (229) | 0 |
Other Investments | (5) | 0 | 0 |
Net cash used in investing activities | (70) | (226) | (135) |
Financing activities | |||
Repurchase of common stock | (1,122) | (523) | (94) |
Proceeds from issuance of common stock | 15 | 11 | 11 |
Payment of long-term financing costs and debt issuance costs | (9) | 0 | (9) |
Repayment of borrowings | 0 | 0 | (370) |
Proceeds from revolving credit agreement borrowings | 695 | 0 | 0 |
Repayment of borrowings under revolving credit agreement | (495) | 0 | 0 |
Awards effectively repurchased for required employee withholding taxes | (30) | (24) | (26) |
Net cash provided by (used in) financing activities | (546) | (536) | 12 |
Effect of exchange rate changes on cash and cash equivalents | 0 | (1) | 0 |
Net increase (decrease) in cash and cash equivalents, unrestricted and restricted | (71) | (201) | 95 |
Cash and cash equivalents, unrestricted and restricted: | |||
Beginning of period | 1,537 | 1,738 | 1,643 |
End of period | 1,466 | 1,537 | 1,738 |
Supplemental disclosures of cash flow information | |||
Interest paid | 25 | 18 | 12 |
Income taxes paid, net | 114 | 128 | 129 |
Supplemental schedule of noncash investing and financing activities | |||
Payable for purchase of property and equipment | 4 | 6 | 3 |
Acquisitions of subsidiaries paid in stock | 0 | 17 | 0 |
2031 Notes Payable | |||
Financing activities | |||
Proceeds from issuance of notes | 400 | 0 | 0 |
2029 Notes Payable | |||
Financing activities | |||
Proceeds from issuance of notes | $ 0 | $ 0 | $ 500 |
DESCRIPTION OF BUSINESS AND SIG
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business TriNet Group, Inc. (TriNet, or the Company, we, our and us) provides comprehensive HCM solutions for small and medium-size businesses under both a PEO model and an HRIS services model. These HCM solutions include multi-state payroll processing and tax administration, employee benefits programs, including health insurance and retirement plans, workers' compensation insurance and claims management, employment and benefit law compliance, and other HR-related services. Through our PEO service model, we are the employer of record for certain employment-related administrative and regulatory purposes for WSEs, including: • compensation through wages and salaries, • certain employer payroll-related tax payments, • employee payroll-related tax withholdings and payments, • employee benefit programs, including health and life insurance, and • workers' compensation coverage. Our PEO clients are responsible for the day-to-day job responsibilities of the WSEs. Through our HRIS services model, we provide cloud-based HCM services to SMBs that allows them to manage hiring, onboarding, employee information, payroll processing, payroll tax administration, health insurance, and other benefits, from a single cloud-based software platform. We are not the co-employer or employer of record for such employees. We operate in one reportable segment. All of our service revenues are generated from external clients. Less than 1% of our revenue is generated outside of the U.S. Basis of Presentation Our consolidated financial statements are prepared in conformity with generally accepted accounting principles in the United States of America (GAAP). All intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts within operating activities of the Consolidated Statement of Cash Flows have been reclassified to conform to current period presentation. In particular, the amortization of deferred costs, consisting of costs to obtain contracts with customers, cloud computing implementation and debt issuance costs, were previously included in depreciation and amortization and are now separately classified as Amortization of Deferred Costs. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect certain reported amounts and related disclosures. These estimates are based on historical experience and on various other assumptions that we believe to be reasonable from the facts available to us. Some of the assumptions are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, our consolidated financial statements could be materially affected. Revenue Recognition Revenues are recognized when the promised services are transferred to our clients, in an amount that reflects the consideration that we expect to receive in exchange for services. We generate all of our revenue from contracts with clients. We disaggregate revenues into professional services revenues and insurance services revenues as reported on the consolidated statements of income and comprehensive income. In the majority of our contracts, both the client and the Company may terminate the contract without penalty by providing a 30-day notice. Performance Obligations At contract inception, we assess the services promised in our contracts with clients and identify a performance obligation for each distinct promise to transfer to the client a service or bundle of services. We determined that the following distinct services represent separate performance obligations: • Payroll and payroll tax processing, • Health benefits services, • Workers’ compensation services, and • A right to receive future services at a discount through a Recovery Credit. Payroll and payroll tax processing performance obligations include services to process payroll and payroll tax-related transactions on behalf of our PEO and HRIS clients. Revenues associated with this performance obligation are reported as professional service revenues and recognized using an output method in which the promised services are transferred when a client's payroll is processed by us and WSEs and users are paid. Professional service revenues are stated net of the gross payroll and payroll tax amounts funded by our clients. Although we assume the responsibilities to process and remit the payroll and payroll related obligations, we do not assume employment-related responsibilities such as determining the amount of the payroll and related payroll obligations. As a result, we are the agent in this arrangement for revenue recognition purposes. Health benefits and workers' compensation services include performance obligations to provide TriNet-sponsored health benefits and workers' compensation insurance coverage through insurance policies provided by third-party insurance carriers and settle deductible amounts on those policies. Revenues associated with these performance obligations are reported as insurance services revenues and are recognized using the output method over the period of time that the client and WSEs are covered under TriNet-sponsored insurance policies. We control the selection of health benefits and workers' compensation coverage made available. As a result, we are the principal in this arrangement for revenue recognition purposes and insurance services revenues are reported gross. In previous years, we created our Recovery Credits to assist in the economic recovery of our existing PEO clients and enhance our ability to retain these clients. These credits were based on the performance of our insurance costs and were recorded as a reduction to insurance services revenues and included in client deposits and other client liabilities on the balance sheet. The change in balance for the liability for credits previously accrued is the following: (in millions) 2023 2022 Balance at beginning of period $ 75 $ 48 (+) Accruals — 75 (-) Distributions to clients (68) (48) Balance at end of period $ 7 $ 75 We generally charge new clients a nominal upfront non-refundable fee to recover our costs to set them up on our TriNet platform for payroll processing and other administrative services, such as benefit enrollments. These fees are accounted for as part of our transaction price and are allocated among the performance obligations based on their relative standalone selling prices. Client Deposits and Other Client Liabilities Client deposits and other client liabilities represents our contractual commitments and payables to clients, including indemnity guarantee payments received from clients, amounts prefunded by clients for their payroll and related taxes and other withholding liabilities before payroll is processed or due for payment, as well as service fee consideration received for unsatisfied performance obligations. Variable Consideration and Pricing Allocation From time to time, we may offer credits to our clients considered to be variable consideration. Incentive credits related to contract renewals are recorded as a reduction to revenue as part of the transaction price at contract inception and are allocated among the performance obligations based on their relative standalone selling prices. We allocate the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. The transaction price for the payroll and payroll tax processing performance obligations is determined upon establishment of the contract that contains the final terms of the arrangement, including the description and price of each service purchased. The estimated service fee is determined based on observable inputs and includes the following key assumptions: target profit margin, pricing strategies including the mix of services purchased and competitive factors, and client and industry specifics. The fees for access to health benefits and workers' compensation insurance performance obligations is determined during the new client on-boarding and enrollment processes based on the types of benefits coverage the WSEs have elected and the applicable risk profile of the client. We estimate our service fees based on actuarial forecasts of our expected insurance premiums and loss sensitive premium costs and amounts to cover our costs to administer these programs. We require our clients to prefund payroll and related taxes and other withholding liabilities before payroll is processed or due for payment. Under the provision of our contracts with clients, we generally will process the payment of a client’s payroll only when the client successfully funds the amount required. As a result, there is no financing arrangement for the contracts. However, certain contracts to provide payroll and payroll tax processing services permit the client to pay certain payroll tax components ratably over periods of up to 12 months rather than as payroll tax is otherwise determined and due, which may be considered a significant financing arrangement under FASB ASC Topic 606 Revenue from Contracts with Customers. However, as the period between our performing the service under the contract and when the client pays for the service is less than one year, we have elected, as a practical expedient, not to adjust the transaction price. Unbilled Revenue For our PEO clients, we recognize WSE payroll and payroll tax liabilities in the period in which the WSEs perform work. When clients' pay periods cross reporting periods, we accrue the portion of the unpaid WSE payroll where we assume, under state regulations, the obligation for the payment of wages and the corresponding payroll tax liabilities associated with the work performed prior to period-end. These estimated payroll and payroll tax liabilities are recorded in accrued wages. The associated receivables, including estimated revenues, offset by advance collections from clients and an allowance for credit losses, are recorded as unbilled revenue. As of December 31, 2023 and 2022, advance collections included in unbilled revenue were $8 million and $9 million, respectively. Contract Costs We recognize as deferred commission expense the incremental cost to obtain a contract with a client for certain components under our commission plans for sales representatives and channel partners that are directly related to new clients onboarded as we expect to recover these costs through future service fees. Such assets are amortized over the estimated average client tenure. These commissions are earned on the basis of the revenue generated from payroll and payroll tax processing performance obligations. When the commission on a renewal contract is not commensurate with the commission on the initial contract, any incremental commission will be capitalized and amortized over the estimated average client tenure. If the commission for both the initial contract and renewal contracts are commensurate, such commissions are expensed in the contract period. The below table summarizes the amounts capitalized and amortized during the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (in millions) 2023 2022 2021 Deferred commission expense: Capitalized $ 33 $ 32 $ 28 Amortized 35 31 25 Certain commission plans pay a commission on estimated professional service revenues over the first 12 months of the contract with clients. The portion of commission paid in excess of the actual commission earned in that period is recorded as prepaid commission. When the prepaid commission is considered earned, it is classified as a deferred commission expense and subject to amortization. We did not have material contract liabilities as of December 31, 2023 and 2022. Insurance Costs Our insurance plans are provided by third-party insurance carriers under risk-based or guaranteed-cost insurance policies. Under risk-based policies, we agree to reimburse our carriers for any claims paid within an agreed-upon per-person deductible layer up to a maximum aggregate exposure limit per policy. These deductible dollar limits and maximum limits vary by carrier and year. Under guaranteed-cost policies, our carriers establish the premiums and we are not responsible for any deductible. Insurance costs include insurance premiums for coverage provided by insurance carriers, expenses for claims costs and other risk management and administrative services, reimbursement of claims payments made by insurance carriers or third-party administrators below a predefined deductible limit, and changes in accrued costs related to contractual obligations with our workers' compensation and health benefit carriers. At policy inception, annual workers' compensation premiums are estimated by the insurance carriers based on projected wages over the duration of the policy period and the risk categories of the WSEs. We initially pay premiums based on these estimates. As actual wages are realized, premium expense recorded may differ from estimated premium expense, creating an asset or liability throughout the policy year. Such asset or liability is reported on our consolidated balance sheets as prepaid expenses or insurance premiums and other payables, respectively. Accrued Workers' Compensation Costs We have secured workers' compensation insurance policies with insurance carriers to administer and pay claims for our clients and WSEs. We are responsible for reimbursing the insurance carriers for losses up to $1 million per claim occurrence (deductible layer). Insurance carriers are responsible for administering and paying claims. We are responsible for reimbursing each carrier up to a deductible limit per occurrence. Accrued workers' compensation costs represent our liability to reimburse insurance carriers for our share of their losses and loss adjustment expenses. These accrued costs are established to provide for the estimated ultimate costs of paying claims within the deductible layer in accordance with workers' compensation insurance policies. These accrued costs include estimates for reported and incurred but not reported (IBNR) losses, accrued costs on reported claims, and expenses associated with settling the claims. In establishing these accrued costs, we use an external actuary to provide an estimate of undiscounted future cash payments that would be made to settle the claims based upon: • historical loss experience, exposure data, and industry loss experience related to TriNet’s insurance policies, • inputs including WSE job responsibilities and location, • historical volume and severity of workers' compensation claims, • an estimate of future cost trends, • expected loss ratios for the latest accident year or prior accident years, adjusted for the loss trend, the effect of rate changes and other quantifiable factors, and • loss development factors to project the reported losses for each accident year to an ultimate basis. We assess the accrued workers' compensation costs on a quarterly basis. For each reporting period, changes in the actuarial methods and assumptions resulting from changes in actual claims experience and other trends are incorporated into the accrued workers' compensation costs. Adjustments to previously established accrued costs estimates are reflected in the results of operations for the period in which the adjustment is identified. Such adjustments could be significant, reflecting any variety of new adverse or favorable trends. Accordingly, final claim settlements may vary materially from the present estimates, particularly when those payments may not occur until well into the future. In our experience, plan years related to workers' compensation programs may take ten years or more to be settled. We do not discount accrued workers' compensation costs. Costs expected to be paid within one year are recorded as accrued workers' compensation costs. Costs expected to be paid beyond one year are included in accrued workers' compensation costs, less current portion. We have collateral agreements with various insurance carriers where either we retain custody of funds in trust accounts which we record as restricted cash and cash equivalents, or remit funds to carriers. Collateral whether held by us, or the carriers, is used to settle our insurance and claim deductible obligations to them. Collateral requirements are established at the policy year and are re-assessed by each carrier annually. Based on the results of each assessment, additional collateral may be required for or paid to the carrier or collateral funds may be released or returned to the Company. In instances where we pay collateral to carriers and the agreement permits net settlement of obligations against collateral held, we record our accrued costs net of that collateral (Carrier Collateral Offset). We offset Carrier Collateral Offset against our obligation due within the next 12 months before applying against long-term obligations. Collateral balances in excess of accrued costs are recorded in other assets. Accrued Health Insurance Costs We sponsor and administer a number of employee benefit plans for our PEO WSEs, including group health, dental, and vision as an employer plan sponsor under section 3(5) of the ERISA. In 2023, the majority of our group health insurance costs related to risk-based plans. Our remaining group health insurance costs were for guaranteed-cost policies. Accrued health insurance costs are established to provide for the estimated unpaid costs of reimbursing the carriers for paying claims within the deductible layer in accordance with risk-based health insurance policies. These accrued costs include estimates for claims incurred but not paid. We assess accrued health insurance costs regularly based upon actuarial studies that include other relevant factors such as current and historical claims payment patterns, plan enrollment and medical trend rates. In certain carrier contracts we are required to prepay our obligations for the expected claims activity for subsequent periods. These prepaid balances by agreement permit net settlement of obligations and offset the accrued health insurance costs. As of December 31, 2023 and 2022, prepayments and miscellaneous receivables offsetting accrued health insurance costs were $58 million and $57 million, respectively. When the prepaid amount is in excess of our recorded liability the net asset position is included in prepaid expenses. As of December 31, 2023 and 2022, accrued health insurance costs offsetting prepaid expenses were $68 million and $73 million, respectively. Leases We determine if a new contractual arrangement is a lease at contract inception. If a contract contains a lease, we evaluate whether it should be classified as an operating or a finance lease. If applicable as a lease, we record our lease liabilities and right-of-use (ROU) assets based on the future minimum lease payments over the lease term and only include options to renew a lease in the future minimum lease payments if it is reasonably certain that we will exercise that option. For certain leases with original terms of twelve months or less we recognize the lease expense as incurred and we do not recognize lease liabilities and ROU assets. We measure our lease liabilities based on the future minimum lease payments discounted over the lease term. We determine our discount rate at lease inception using our incremental borrowing rate, which is based on our outstanding debts that are collateralized by certain corporate assets. As of December 31, 2023 and 2022, the weighted-average rate used in discounting the lease liability was 4.2% and 3.9%, respectively. We measure our ROU assets based on the associated lease liabilities adjusted for any lease incentives such as tenant improvement allowances and classify operating ROU assets in other assets in our consolidated balance sheets. For operating leases, we recognize expense for lease payments on a straight-line basis over the lease term. Cash and Cash Equivalents Cash and cash equivalents include bank deposits and short-term, highly liquid investments. Investments with original maturity dates of three months or less are considered cash equivalents. Restricted Cash, Cash Equivalents and Investments Restricted cash, cash equivalents and investments presented on our consolidated balance sheets include: • cash and cash equivalents in trust accounts functioning as security deposits for our insurance carriers, • payroll funds collected representing cash collected in advance from clients which we designate as restricted for the purpose of funding WSE payroll and payroll taxes and other payroll related liabilities, and • amounts held in trust for current and future premium and claim obligations with our insurance carriers, which amounts are held in trust according to the terms of the relevant insurance policies and by the local insurance regulations of the jurisdictions in which the policies are in force. Investments Our marketable investments are primarily classified as available-for-sale and are carried at estimated fair value. Unrealized gains and losses are reported as a component of accumulated other comprehensive income, net of deferred income taxes. The amortized cost of debt investments is adjusted for amortization of premiums and accretion of discounts from the date of purchase to the earliest call date for premiums or the maturity date for discounts. Such amortization is included in interest income as an addition to or deduction from the coupon interest earned on the investments. We use the specific identification method to determine realized gains and losses on the sale of available-for-sale securities. Realized gains and losses are included in interest expense, bank fees, and other in the accompanying consolidated statements of income and comprehensive income. We assess our investments for credit impairment. We review several factors to determine whether an unrealized loss is credit related, such as financial condition and future prospects of the issuer. To the extent that a security's amortized cost basis exceeds the present value of the cash flows expected to be collected from the security, an allowance for credit losses will be recognized. If management intends to sell or will more likely than not be required to sell the security before any anticipated recovery, a write down will be recognized in earnings measured as the entire difference between the amortized cost and the then-current fair value. We have investments within our unrestricted and our restricted accounts. Unrestricted investments are recorded on the balance sheet as current or noncurrent based upon the remaining time to maturity, and investments subject to restrictions are classified as current or noncurrent based on the expected payout of the related liability. Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive (loss) income includes those gains and losses included in comprehensive income, but excluded from net income, in accordance with GAAP. Other comprehensive (loss) income is primarily comprised of net unrealized gains or losses arising on available-for-sale investments, net of deferred taxes. Fair Value of Financial Instruments Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. Our financial assets recorded at fair value on a recurring basis are comprised of cash equivalents, available-for-sale marketable securities and certificates of deposits. We measure certain financial assets at fair value for disclosure purposes, as well as on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. Our other current financial assets and liabilities have fair values that approximate their carrying value due to their short-term nature. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market to measure fair value, summarized as follows: • Level 1—observable inputs for identical assets or liabilities, such as quoted prices in active markets, • Level 2—inputs other than the quoted prices in active markets that are observable either directly or indirectly, • Level 3—unobservable inputs in which there is little or no market data, which requires that we develop our own assumptions. The fair value hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We classify our cash equivalents, investments and long-term debt in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety. Accounts Receivable Our accounts receivable represents outstanding gross billings to clients, net of an allowance for estimated credit losses. We require our clients to prefund payroll and related liabilities before payroll is processed or due for payment. If a client fails to fund payroll or misses the funding cut-off, at our sole discretion, we may pay the payroll and the resulting amounts due to us are recognized as accounts receivable. When client payment is received in advance of our performance under the contract, such amount is recorded as client deposits. We establish an allowance for credit losses based on the credit quality of clients, current economic conditions, the age of the accounts receivable balances, historical experience, and other factors that may affect clients’ ability to pay, and charge-off amounts against the allowance when they are deemed uncollectible. The allowance was immaterial at December 31, 2023 and 2022. Property and Equipment We record property and equipment at historical cost and compute depreciation using the straight-line method over the estimated useful lives of the assets or the lease terms, generally five years to seven years for office equipment, furniture and fixtures, and the shorter of the asset life or the remaining lease term for leasehold improvements. We expense the cost of maintenance and repairs as incurred and capitalize leasehold improvements. We periodically assess the likelihood of unsuccessful completion of projects in progress, as well as monitor events or changes in circumstances, which might suggest that impairment has occurred, and recoverability should be evaluated. An impairment loss is recognized if the carrying amount of the asset is not recoverable and exceeds the future net cash flows expected to be generated by the asset. We evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An asset is considered impaired if the carrying amount exceeds the undiscounted future net cash flows the asset is expected to generate. An impairment charge is recognized for the amount by which the carrying amount of the assets exceeds its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less selling costs. Goodwill, Software and Other Intangible Assets Our goodwill and identifiable intangible assets with indefinite useful lives are not amortized but are tested for impairment on an annual basis or when an event occurs or circumstances change in a way to indicate that there has been a potential decline in the fair value of the reporting unit. Goodwill impairment is determined by comparing the estimated fair value of the reporting unit to its carrying amount, including goodwill. All goodwill is associated with one reporting unit within our one reportable segment. Annually, we perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit has declined below its carrying value. This assessment considers various financial, macroeconomic, industry, and reporting unit specific qualitative factors. We perform our annual impairment testing in the fourth quarter. Based on the results of our reviews, no impairment loss was recognized in the results of operations for the years ended December 31, 2023, 2022 and 2021. Intangible assets and software with finite useful lives are amortized over their respective estimated useful lives ranging from one year to ten years using either the straight-line method or an accelerated method. Intangible assets are reviewed for indicators of impairment at least annually and evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We capitalize internal and external costs incurred to develop internal-use computer software during the application development stage. Application development stage costs include software configuration, coding, and installation. Capitalized costs are amortized on a straight-line basis over the estimated useful life, typically ranging from three years to six years, commencing when the software is placed into service. We expense costs incurred during the preliminary project stage, as well as general and administrative, overhead, maintenance and training costs, and costs that do not add functionality to existing systems. Advertising Costs We expense the costs of producing advertisements at the time production occurs, and expense the cost of running advertisements in the period in which the advertising space or airtime is used as sales and marketing expense. Advertising costs were $37 million, $29 million, and $21 million for the years ended December 31, 2023, 2022 and 2021, respectively. Stock Based Compensation Our stock-based awards to employees include time based and performance based restricted stock units and restricted stock awards, stock options and an employee stock purchase plan. Compensation expense associated with restricted stock units and restricted stock awards is based on the fair value of common stock on the date of grant. Compensation expense associated with stock options and employee stock purchase plan are based on the estimated grant date fair value method using the Black-Scholes option pricing model. Expense is recognized using a straight-line amortization method over the respective vesting period for awards that are ultimately expected to vest, with adjustments to expense recognized in the period in which forfeitures occur. Income Taxes We account for our provision for income taxes using the asset and liability method, under which we recognize income taxes payable or refundable for current year and deferred tax assets and liabilities for the future tax effect of events that have been recognized in either our financial statements or tax returns. We measure our current and deferred tax assets and liabilities based on provision of enacted tax laws of those jurisdictions in which we operate. The effect of changes in tax laws and regulations, or interpretations, is recognized in our consolidated financial statements in the period that includes the enactment date. We recognize deferred tax assets and liabilities based on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes, as well as the expected benefits of using net operating loss and other carryforwards. We establish a valuation allowance when it is determined more likely than not that the deferred tax assets will not be realized. Provision for income taxes may change when estimates used in determining valuation allowances change or when receipt of new information indicates the need for adjustment in valuation allowances. Changes in valuation allowances are reflected as a component of the provision for income taxes in the period of adjustment. We recognize a reserve for uncertain tax positions taken or expected to be taken in a tax return when it is concluded that tax positions are not more likely than not to be sustained upon examination by taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the positions. Assumptions, judgment and the use of estimates are required in determining if the more likely than not standard has been met when developing the provision for i |
CASH, CASH EQUIVALENTS AND INVE
CASH, CASH EQUIVALENTS AND INVESTMENTS - UNRESTRICTED AND RESTRICTED | 12 Months Ended |
Dec. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND INVESTMENTS - UNRESTRICTED AND RESTRICTED | CASH, CASH EQUIVALENTS AND INVESTMENTS - UNRESTRICTED AND RESTRICTED Under the terms of the agreements with certain of our workers' compensation and health benefit insurance carriers, we are required to maintain collateral in trust accounts for the benefit of specified insurance carriers and to reimburse the carriers’ claim payments within our deductible layer. We invest a portion of the collateral amounts in marketable securities. We report the current and noncurrent portions of these trust accounts as restricted cash, cash equivalents and investments on the consolidated balance sheets. We require our clients to prefund their payroll and related taxes and other withholding liabilities before payroll is processed or due for payment. This prefund is included in restricted cash, cash equivalents and investments as payroll funds collected, which is designated to pay pending payrolls, payroll tax liabilities and other payroll withholdings. We also invest available corporate funds, primarily in fixed income securities which meet the requirements of our corporate investment policy and are classified as AFS. Our total cash, cash equivalents and investments are summarized below: December 31, 2023 December 31, 2022 (in millions) Cash and cash equivalents Available-for-sale marketable securities Total Cash and cash equivalents Available-for-sale marketable securities Total Cash and cash equivalents $ 287 $ — $ 287 $ 354 $ — $ 354 Investments — 65 65 — 76 76 Restricted cash, cash equivalents and investments Payroll funds collected 1,067 — 1,067 1,062 — 1,062 Collateral for health benefits claims 31 113 144 29 110 139 Collateral for workers' compensation claims 54 2 56 58 — 58 Other security deposits 2 — 2 4 — 4 Total restricted cash, cash equivalents and investments 1,154 115 1,269 1,153 110 1,263 Investments, noncurrent — 143 143 — 151 151 Restricted cash, cash equivalents and investments, noncurrent Collateral for workers' compensation claims 25 133 158 27 123 150 Other security deposits — — — 3 — 3 Total $ 1,466 $ 456 $ 1,922 $ 1,537 $ 460 $ 1,997 |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The following tables summarize our financial instruments by significant categories and fair value measurement on a recurring basis as of December 31, 2023 and December 31, 2022 and the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of our AFS investments: (in millions) Fair Value Level Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Investments Restricted Cash, Cash Equivalents and Investments December 31, 2023 Cash equivalents: Money market mutual funds Level 1 $ 183 $ — $ — $ 183 $ 96 $ — $ 87 U.S. treasuries Level 2 7 — — 7 5 — 2 Total cash equivalents 190 — — 190 101 — 89 AFS Investments: Asset-backed securities Level 2 41 — (1) 40 — 40 — Corporate bonds Level 2 135 1 — 136 — 103 33 Agency securities Level 2 40 — (1) 39 — 10 29 U.S. treasuries Level 2 231 1 (1) 231 — 47 184 Certificate of deposit Level 2 2 — — 2 — — 2 Other debt securities Level 2 8 — — 8 — 8 — Total AFS Investments $ 457 $ 2 $ (3) $ 456 $ — $ 208 $ 248 (in millions) Fair Value Level Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Investments Restricted Cash, Cash Equivalents and Investments December 31, 2022 Cash equivalents: Money market mutual funds Level 1 $ 314 $ — $ — $ 314 $ 225 $ — $ 89 U.S. treasuries Level 2 18 — — 18 18 — — Total cash equivalents 332 — — 332 243 — 89 AFS Investments: Asset-backed securities Level 2 42 — (2) 40 — 40 — Corporate bonds Level 2 140 — (1) 139 — 112 27 Agency securities Level 2 33 — (1) 32 — 5 27 U.S. treasuries Level 2 229 — — 229 — 62 167 Certificate of deposit Level 2 12 — — 12 — — 12 Other debt securities Level 2 8 — — 8 — 7 1 Total AFS Investments $ 464 $ — $ (4) $ 460 $ — $ 226 $ 234 Fair Value of Financial Instruments We use an independent pricing source to determine the fair value of our securities. The independent pricing source utilizes various pricing models for each asset class, including the market approach. The inputs and assumptions for the pricing models are market observable inputs including trades of comparable securities, dealer quotes, credit spreads, yield curves and other market-related data. We have not adjusted the prices obtained from the independent pricing service and we believe the prices received from the independent pricing service are representative of the prices that would be received to sell the assets at the measurement date (exit price). The carrying value of the Company's cash equivalents and restricted cash equivalents approximate their fair values due to their short-term maturities. We did not have any Level 3 financial instruments recognized in our balance sheets as of December 31, 2023 and December 31, 2022. There were no transfers between levels as of December 31, 2023 and December 31, 2022. Sales and Maturities The fair value of debt investments by contractual maturity are shown below: (in millions) December 31, 2023 One year or less $ 93 Over one year through five years 332 Over five years through ten years 11 Over ten years 20 Total fair value $ 456 The gross proceeds from sales and maturities of AFS securities for the years ended December 31, 2023, 2022, and 2021 are presented below. We had immaterial gross realized gains and losses from sales of investments for the year ended December 31, 2021. Year Ended December 31, (in millions) 2023 2022 2021 Gross realized losses $ (1) $ (18) $ — Gross proceeds from sales 150 227 162 Gross proceeds from maturities 137 253 187 Total $ 286 $ 462 $ 349 Unrealized Losses on AFS Investments Unrealized losses on fixed income securities are principally caused by changes in market interest rates and the financial condition of the issuer. In analyzing an issuer's financial condition, we consider whether the securities are issued by the federal government or its agencies, whether downgrades by credit rating agencies have occurred, and industry analysts' reports. Actual maturities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties. As of December 31, 2022, management recorded an impairment loss of $7 million on fixed income securities due to the probability that management could sell these securities before they recover in value. None of this impairment was credit-related. After this recognized impairment, gross unrealized losses related to AFS investments in an unrealized loss position were $4 million. Gross unrealized losses were immaterial at December 31, 2023 and December 31, 2021. Fair Value of Long-Term Debt The fair value of our 2029 Notes and 2031 Notes was obtained from a third-party pricing service and is based on observable market inputs. As such, the fair value of the senior notes is considered Level 2 in the hierarchy for fair value measurement. As of December 31, 2023, our 2029 Notes and 2031 Notes were carried at their cost, net of issuance costs, and had a fair value of $443 million and $414 million, respectively. As of December 31, 2022, our 2029 Notes were carried at their cost, net of issuance costs, and had a fair value of $413 million. Our 2021 Revolver is a floating rate debt. At December 31, 2023, the fair value of our 2021 Revolver approximated its carrying value (exclusive of issuance costs). The fair value of our floating rate debt is estimated based on a discounted cash flow, which incorporates credit spreads, market interest rates and contractual maturities to estimate the fair value and is considered Level 3 in the hierarchy for fair value measurement. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment, net, consists of the following: (in millions) December 31, 2023 December 31, 2022 Office equipment, including data processing equipment $ 37 $ 36 Leasehold improvements 19 21 Furniture, fixtures, and equipment 14 16 Projects in progress 2 4 Total 72 77 Less: Accumulated depreciation (55) (50) Less: Impairments (1) $ — (3) Property and equipment, net $ 17 $ 24 (1) Amount includes impairment of leasehold improvements in leased office space that we have exited. Refer to Note 7 in Part II, Item 8. Financial Statements and Supplementary Data, of this Form 10-K. Depreciation of property and equipment was $9 million, $10 million, and $9 million for years ended December 31, 2023, 2022, and 2021, respectively. |
GOODWILL, SOFTWARE AND OTHER IN
GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET | GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET Changes in goodwill for the years ended December 31, 2023 and 2022 are as follows: (in millions) Amount Balance at December 31, 2021 $ 294 Additions 168 Balance at December 31, 2022 $ 462 Additions — Balance at December 31, 2023 $ 462 The following summarizes software and other intangible assets: December 31, 2023 December 31, 2022 (in millions) Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangibles: Software 3 years 350 (255) 95 278 (213) 65 Customer relationships 6 years 49 (18) 31 135 (93) 42 Developed technology 6 years 65 (19) 46 65 (9) 56 Total $ 464 $ (292) $ 172 $ 478 $ (315) $ 163 Amortization of intangible assets during the years ended December 31, 2023, 2022 and 2021 was $63 million, $54 million and $50 million respectively. We evaluate the remaining useful life of intangible assets annually to determine whether events and circumstances warrant a revision to the estimated remaining useful life. During the year ended December 31, 2021, we recognized a $7 million impairment of a customer relationship intangible due to higher than expected attrition. There were no impairment charges recognized for the years ended December 31, 2023 and 2022. The following table summarizes our capitalized internally developed software costs and related depreciation expense. Year Ended December 31, (in millions) 2023 2022 2021 Capitalized internally developed software costs 69 48 33 Depreciation expense for capitalized internally developed software costs 42 35 33 Expense related to intangibles amortization in future periods as of December 31, 2023 is expected to be as follows: Year ending December 31: Amount 2024 $ 59 2025 46 2026 31 2027 23 2028 7 2029 and thereafter 3 Total $ 169 |
ACCRUED WORKERS' COMPENSATION C
ACCRUED WORKERS' COMPENSATION COSTS | 12 Months Ended |
Dec. 31, 2023 | |
Insurance [Abstract] | |
ACCRUED WORKERS' COMPENSATION COSTS | ACCRUED WORKERS' COMPENSATION COSTS The following table summarizes the accrued workers’ compensation cost activity for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (in millions) 2023 2022 2021 Total accrued costs, beginning of year $ 189 $ 198 $ 205 Incurred Current year 66 68 66 Prior years (36) (32) (23) Total incurred 30 36 43 Paid Current year (10) (10) (10) Prior years (34) (35) (40) Total paid (44) (45) (50) Total accrued costs, end of year $ 175 $ 189 $ 198 The following tables summarize workers' compensation liabilities on the consolidated balance sheets: (in millions) December 31, 2023 December 31, 2022 Total accrued costs, end of year $ 175 $ 189 Collateral paid to carriers and offset against accrued costs (5) (7) Total accrued costs, net of carrier collateral offset $ 170 $ 182 Payable in less than 1 year (net of collateral paid to carriers of $1 and $2 as of December 31, 2023 and 2022, respectively) $ 50 54 Payable in more than 1 year (net of collateral paid to carriers of $4 and $5 as of December 31, 2023 and 2022, respectively) 120 128 Total accrued costs, net of carrier collateral offset $ 170 $ 182 Incurred claims related to prior years represent changes in estimates for ultimate losses on workers' compensation claims. For the years ended December 31, 2023, 2022 and 2021, the favorable development is due to lower than expected reported claim frequency and severity for the more recent years. As of December 31, 2023 and 2022, we had $32 million and $43 million of collateral held by insurance carriers of which $5 million and $7 million, respectively, was offset against accrued workers' compensation costs as the agreements permit and are net settled of insurance obligations against collateral held. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES Our leasing activities predominantly consist of leasing office space that we occupy, which we have classified as operating leases. Our leases are comprised of fixed payments with remaining lease terms of 1 to 6 years. As of December 31, 2023, we have not included any options to extend or cancel in the calculation of our lease liability or ROU asset. We do not have any significant residual value guarantees or restrictive covenants in our leases. We recognized operating lease expense of $11 million, $15 million and $13 million for the years ended December 31, 2023, 2022 and 2021, respectively. For the years ended December 31, 2023 and 2022, we recognized $6 million and $20 million, respectively, of lease impairment due to the closing of several offices. As of December 31, 2023 and 2022, the weighted average remaining lease term on our operating leases was 3.8 years and 4.4 years, respectively. Future minimum lease payments as of December 31, 2023 were as follows: (in millions) December 31, 2023 2024 $ 15 2025 13 2026 8 2027 7 2028 5 2029 and thereafter — Total future minimum lease payments $ 48 Less: imputed interest (4) Total operating lease liabilities $ 44 Current portion 14 Non-current portion 30 |
LONG-TERM DEBT AND REVOLVING CR
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT BORROWINGS | 12 Months Ended |
Dec. 31, 2023 | |
Line of Credit Facility [Abstract] | |
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT BORROWINGS | LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT BORROWINGS The following table summarizes our long-term debt and revolving credit agreement borrowings as of December 31, 2023 and 2022. (Dollars in millions) Annual contractual interest rate Effective interest rate Principal amount Deferred issuance costs Less: current portion Long-term debt, noncurrent December 31, 2023 December 31, 2022 2021 Revolver 6.58 % 7.07 % $ 200 $ — $ (109) $ 91 $ — 2029 Notes 3.50 % 3.67 % $ 500 $ (3) $ — $ 497 $ 496 2031 Notes 7.13 % 7.30 % $ 400 $ (4) $ — $ 396 $ — In March 2023, as a precaution to ensure we maintained liquidity during the uncertainty of the banking crisis that followed the failure of Silicon Valley Bank, we drew down the available $495 million of capacity under our 2021 Revolver. As concerns about market liquidity subsided, we repaid $200 million in March and the remaining $295 million in April. In September of 2023, we drew down $200 million of this revolver to partially fund our third quarter of 2023 share repurchases. In February 2021, we issued $500 million aggregate principal of 3.50% senior unsecured notes maturing in March 2029 (our 2029 Notes). In August 2023, we issued $400 million aggregate principal of 7.125% senior unsecured notes maturing in August 2031 (our 2031 Notes). Interest payments on the 2031 Notes are due semi-annually in arrears on February 15 and August 15, beginning on February 15, 2024. We used the net proceeds to fund an equity tender offer and a private share repurchase, each of which were executed in the third quarter of 2023 (including the related fees and expenses). We may voluntarily redeem all or a part of the 2031 Notes on or after August 15, 2026, on any one or more occasions, at the redemption prices set forth in the indenture governing the 2031 Notes, plus, in each case, accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date. In addition, at any time prior to August 15, 2026, we may on any one or more occasions redeem up to 40% of the aggregate principal amount of the 2031 Notes outstanding under the indenture governing the 2031 Notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 107.125% of the principal amount of the 2031 Notes then outstanding, plus accrued and unpaid interest thereon, if any, to, but excluding the applicable redemption date. At any time prior to August 15, 2026, we may also redeem all or a part of the 2031 Notes at a redemption price equal to 100% of the principal amount of the 2031 Notes redeemed plus a “make-whole” premium as of, and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In February 2021, concurrently with the closing of the 2029 Notes offering, we entered into a new $500 million revolving facility (our 2021 Revolver) under a new credit agreement (our 2021 Credit Agreement) and our 2018 Credit Agreement was terminated. Letters of credit issued pursuant to the revolving facility reduce the amount available for borrowing under the 2021 Revolver. In August 2023, concurrently with the issuance of the 2031 Notes, we amended certain provisions of our credit agreement, dated February 26, 2021, as amended, to, among other things (1) increasing the aggregate capacity under our 2021 Revolver from $500 million to $700 million and (2) extending the maturity date of our 2021 Revolver to August 16, 2028. The annual interest rate for borrowings under our 2021 Revolver was previously calculated based on an applicable LIBOR tenor of our choosing, plus a margin of 1.25% to 2.00%, or, at our option, the alternative base rate (ABR), plus a margin of 0.25% to 1.00%. In the second quarter of 2023, we replaced the interest rate based on LIBOR and related LIBOR-based mechanics with an interest rate based on the forward-looking Secured Overnight Financing Rate (Term SOFR). Term SOFR loans will be charged interest at the Term SOFR rate (subject to a 0.00% floor), plus a margin between 1.25% and 2.00%, depending on the Company’s total net leverage ratio, plus a credit adjustment spread of 10 basis points for all tenors (such Term SOFR rate plus the credit adjustment spread, the "Adjusted Term SOFR Rate"). The applicable Term SOFR or ABR margin is based on our Total Leverage Ratio, as defined in the 2021 Credit Agreement. The ABR is the highest of (a) the applicable Federal Reserve Bank of New York rate in effect on such day (which rate is the greater of the Federal funds Effective Rate in effect on such day and the Overnight Bank Funding Rate in effect on such day), as defined in our 2021 Credit Agreement plus 0.50% (b) the prime rate in effect on such day, and (c) the Adjusted Term SOFR Rate for a one month interest period, as published by two U.S. Government Securities Business Days prior to such day daily plus 1.00%. The interest rate for 2023 borrowings under our 2021 Revolver was 6.582% - 8.125%. As of December 31, 2023, we had remaining capacity of $494 million under our 2021 Revolver. In the event TriNet Group, Inc. receives a Corporate Issuer Credit Rating that is one level below investment grade rating or higher from at least two Nationally Recognized Statistical Rating Organizations, then rating based pricing applies and, for so long as rating-based pricing applies, irrespective of the Total Leverage Ratio, the Term SOFR margin will be 1.125% and the ABR margin will be 0.125%. The indenture governing our 2029 Notes and 2031 Notes each includes restrictive covenants limiting our ability to: (i) create liens on certain assets to secure debt; (ii) grant a subsidiary guarantee of certain debt without also providing a guarantee of the 2029 Notes or 2031 Notes, as applicable; and (iii) consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of our assets to, another person, subject, in each case, to certain customary exceptions. The 2021 Credit Agreement includes negative covenants that limit our ability to incur indebtedness and liens, sell assets and make restricted payments, including dividends and investments, subject to certain exceptions. In addition, the 2021 Credit Agreement also contains other customary affirmative and negative covenants and customary events of default. The 2021 Credit Agreement also contains a financial covenant that requires the Company to maintain certain maximum total net leverage ratios. We were in compliance with all financial covenants under the 2021 Credit Agreement, 2029 Notes and 2031 Notes at December 31, 2023. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contingencies On September 29, 2020, a class action was filed in the United States District Court for the Middle District of Florida against the directors of certain TriNet subsidiaries and other TriNet employees on behalf of a putative class of participants in two retirement plans available to TriNet’s eligible worksite employees, the TriNet 401(k) Plan and the TriNet Select 401(k) Plan. The complaint is similar to claims recently brought against a number of employers including PEOs and generally alleges that the defendants violated certain fiduciary obligations to Plan participants under the Employee Retirement Income Security Act of 1974 with respect to overseeing plan investment and recordkeeping fees. On October 21, 2022, the court issued an order declining to certify a class with respect to claims against the TriNet 401(k) Plan, but certified a class with respect to claims against the TriNet Select 401(k) Plan. On April 26, 2023, the court entered an order granting TriNet's motion for summary judgment on all remaining claims. No appeal was timely filed and the matter is closed. We are and, from time to time, have been and may in the future become involved in various litigation matters, legal proceedings, and claims arising in the ordinary course of our business, including disputes with our clients or various class action, collective action, representative action, and other proceedings arising from the nature of our co-employment relationship with our clients and WSEs in which we are named as a defendant. In addition, due to the nature of our co-employment relationship with our clients and WSEs, we could be subject to liability for federal and state law violations, even if we do not participate in such violations. While our agreements with our clients contain indemnification provisions related to the conduct of our clients, we may not be able to avail ourselves of such provisions in every instance. We have accrued our current best estimates of probable losses with respect to these matters, which are individually and in aggregate immaterial to our consolidated financial statements. While the outcome of the matters described above cannot be predicted with certainty, management currently does not believe that any such claims or proceedings will have a materially adverse effect on our consolidated financial position, results of operations, or cash flows. However, the unfavorable resolution of any particular matter or our reassessment of our exposure for any of the above matters based on additional information obtained in the future could have a material impact on our consolidated financial position, results of operations, or cash flows. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION Equity Based Incentive Plans Our 2019 Equity Incentive Plan and as amended and restated (the 2019 Plan), approved in May 2019, provides for the grant of stock awards, including stock options, RSUs, RSAs, and other stock awards. There were approximately 5 million shares available for grant under the 2019 Plan as of December 31, 2023. The 2009 Equity Incentive Plan (the 2009 Plan), was replaced by the 2019 Plan, except that any outstanding awards granted under the 2009 Plan remain in effect pursuant to their terms. Stock Options Stock options are granted to employees at exercise prices equal to the fair market value of our common stock on the dates of grant. Stock options generally have a maximum contractual term of 10 years. Stock options generally vest over 4 years, and are generally forfeited if the employee terminates service prior to vesting. The following table summarizes stock option activity for the year ended December 31, 2023: Number Weighted Weighted (in years) Aggregate Balance at December 31, 2022 190,275 $ 20.50 1.5 $ 9 Exercised (182,067) 20.50 14 Balance at December 31, 2023 (1) 8,208 $ 19.50 0.45 $ 1 (1) All options are vested and exercisable. Year Ended December 31, Additional Disclosures for Stock Options (in millions) 2023 2022 2021 Total intrinsic value of options exercised 14 8 6 Cash received from options exercised 4 1 1 Restricted Stock Units (RSUs) Time-based RSUs generally vest over a four-year term. Performance-based RSUs are subject to vesting requirements and are earned, in part, based on certain financial performance metrics as defined in the grant notice. Actual number of shares earned may range from 0% to 200% of the target award. Performance-based awards granted in 2023, 2022 and 2021 are earned based on a single-year performance period subject to subsequent multi-year time-based vesting with 50% of the shares earned vesting in one year after the performance period and the remaining shares in the year after. RSUs are generally forfeited if the participant terminates service prior to vesting. The following tables summarize RSU activity for the year ended December 31, 2023: Time-based RSUs Total Number of RSUs Weighted-Average Grant Date Fair Value Nonvested at December 31, 2022 1,198,561 $ 80.75 Granted 769,286 78.27 Vested (617,937) 76.25 Forfeited (120,708) 82.58 Nonvested at December 31, 2023 1,229,202 $ 80.88 Year Ended December 31, Additional Disclosures for equity-based plans 2023 2022 2021 Total grant date fair value of shares granted (in millions) $ 60 $ 85 $ 47 Total grant date fair value of shares vested (in millions) $ 47 $ 42 $ 34 Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees 213,569 204,191 207,603 Performance-based RSUs Total Number Shares Weighted-Average Grant Date Fair Value Nonvested at December 31, 2022 202,586 $ 86.82 Granted 177,067 79.05 Vested (156,642) 86.22 Nonvested at December 31, 2023 223,011 $ 81.08 Year Ended December 31, Additional Disclosures for equity-based plans 2023 2022 2021 Total grant date fair value of shares granted (in millions) (1) $ 14 $ 20 $ 16 Total grant date fair value of shares vested (in millions) $ 14 $ 17 $ 8 Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees 74,923 119,901 77,787 (1) Amount includes fair value of finalized additional grant related to the most recently ended performance period. Employee Stock Purchase Plan Our 2014 Employee Stock Purchase Plan (ESPP) offers eligible employees an option to purchase shares of our common stock through payroll deductions. The purchase price is equal to the lesser of 85% of the fair market value of our common stock on the offering date or 85% of the fair market value of our common stock on the applicable purchase date. Offering periods are approximately six months in duration and will end on or about May 15 and November 15 of each year. The plan is considered to be a compensatory plan. As of December 31, 2023, approximately 5 million shares were reserved for future issuances under the ESPP. In applying the Black Scholes option valuation model for the ESPP options, we use the following assumptions: Year Ended December 31, (in millions) 2023 2022 2021 Expected Term (in Years) 0.5 0.5 0.5 Expected Volatility 29-35% 21-39% 21-35% Risk-Free Interest Rate 5.3-5.4% 0.7-4.5% 0.4-0.7% Expected Dividend Yield 0 % 0 % 0 % Shares Issued under ESPP 175,446 158,134 136,861 Stock Based Compensation Stock based compensation expense is measured based on the fair value of the stock award on the grant date and recognized over the requisite service period for each separately vesting portion of the stock award. Stock based compensation expense and other disclosures for stock based awards made to our employees pursuant to the equity plans were as follows: Year Ended December 31, (in millions) 2023 2022 2021 Cost of providing services $ 14 $ 13 $ 12 Sales and marketing 8 7 6 General and administrative 33 38 29 Systems development and programming costs 4 4 3 Total stock based compensation expense $ 59 $ 62 $ 50 Total stock based compensation capitalized $ 3 $ 1 $ 1 Income tax benefit related to stock based compensation expense $ 13 $ 13 $ 10 Tax benefit realized $ 19 $ 14 $ 16 The table below summarizes unrecognized compensation expense for the year ended December 31, 2023 associated with the following: Amount Weighted-Average Period (in Years) Nonvested time based RSUs $ 92 2.47 Nonvested performance based RSUs 10 1.66 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Common Stock The following table shows the beginning and ending balances of our issued and outstanding common stock for the year ended December 31, 2023, 2022, and 2021: Year Ended 2023 2022 2021 Shares issued and outstanding, beginning balance 60,555,661 65,968,224 66,456,663 Issuance of common stock from vested restricted stock units 774,579 841,861 748,881 Issuance of common stock from exercise of stock options 182,067 116,592 73,118 Issuance of common stock for employee stock purchase plan 175,446 158,134 136,861 Issuance of common stock for the acquisition of Zenefits — 193,221 — Repurchase of common stock (10,734,790) (6,398,279) (1,161,909) Awards effectively repurchased for required employee withholding taxes (288,492) (324,092) (285,390) Shares issued and outstanding, ending balance 50,664,471 60,555,661 65,968,224 Stock Repurchases In February 2020, our board of directors authorized a $300 million incremental increase to our ongoing stock repurchase program. In February 2022 and November 2022, our board of directors authorized a further $300 million and $200 million, respectively, incremental increase to this stock repurchase program. In February 2023 and July 2023, our board of directors authorized a further $300 million and $1 billion, respectively, incremental increase to this stock repurchase program. This repurchase authorization has no expiration. On March 17, 2022, we completed a tender offer through which we repurchased 3,653,690 shares of common stock at a price of $86.50 per share, for total consideration of approximately $319 million, which includes costs directly attributable to the purchase. On December 6, 2022. we completed a second tender offer and purchased 1,515,258 shares of common stock at a price of $72.00 per share, for total consideration of approximately $111 million, which includes costs directly attributable to the purchase. In August 2023, we completed a tender offer through which we repurchased 5,981,308 shares of common stock at a price of $107.00 per share, for total consideration of approximately $640 million. In September 2023, we repurchased 3,364,486 shares of common stock at a price of $107.00 per share, for total consideration of approximately $360 million, through a purchase agreement with our largest stockholder, Atairos Group, Inc. Atairos Group, Inc. agreed to proportionally sell additional shares so as to continue to beneficially own approximately 36% of the outstanding Shares immediately following the completion of the Closing. We retire shares in the period they are acquired and account for the payment as a reduction to stockholders' equity (retained deficit). The following table summarizes the share repurchases under this program for the years ended December 31, 2023, 2022 and 2021: Year Ended 2023 2022 2021 Total cost (in millions) $ 1,112 $ 519 $ 94 Total shares 10,734,790 6,398,279 1,161,909 Average price per share $ 103.59 $ 81.07 $ 81.13 As of December 31, 2023, $433 million remains available for repurchase under all authorizations approved by the board of directors. Dividends |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Provision for Income Taxes We are subject to tax in U.S. federal and various state and local jurisdictions, as well as Canada and India. We are open to federal and significant state income tax examinations for tax year 2018 and subsequent years. The provision for income taxes consists of the following: Year Ended December 31, (in millions) 2023 2022 2021 Current: Federal $ 96 $ 112 $ 86 State 24 36 28 Foreign 2 — 1 Total Current 122 148 115 Deferred: Federal 1 (17) (7) State 3 (6) (3) Foreign — 2 (2) Total Deferred 4 (21) (12) Total $ 126 $ 127 $ 103 The U.S. federal statutory income tax rate reconciled to our effective tax rate is as follows: Year Ended December 31, 2023 2022 2021 (in millions, except percent) Pre-Tax Income Tax Expense/(Benefit) Percent of Pre-Tax Income (Loss) Pre-Tax Income Tax Expense/(Benefit) Percent of Pre-Tax Income (Loss) Pre-Tax Income Tax Expense/(Benefit) Percent of Pre-Tax Income (Loss) $ 501 $ 482 $ 441 U.S. federal statutory tax rate $ 105 21 % $ 101 21 % $ 93 21 % State income taxes, net of federal benefit 34 7 34 7 32 7 Tax rate change 1 — — — (1) — Nondeductible meals, entertainment and penalties 2 — 3 1 2 — Stock based compensation (2) — 3 1 (2) — Uncertain tax positions — — — — (1) — Tax credits (6) (1) (8) (2) (7) (2) State and tax return to provision adjustments (11) (2) (9) (2) (10) (2) Other 3 — 3 — (3) (1) Total $ 126 25 % $ 127 26 % $ 103 23 % Our effective income tax rate decreased by 1% to 25% in 2023 from 26% in 2022. The decrease was primarily due to an increase in excludable income for state tax purposes and an increase in tax benefits related to stock-based compensation. The Inflation Reduction Act enacted on August 16, 2022 introduced new provisions including an excise tax on net stock repurchases made after December 31, 2022. Global tax developments from the Organization for Economic Cooperation and Development proposes implementation of a global minimum tax under the Pillar Two model rules. Management has determined this development applicable to multinational businesses does not have a material impact to our business, cash flows, or financial results. Deferred Income Taxes Significant components of our deferred tax assets and liabilities are as follows: Year Ended December 31, (in millions) 2023 2022 Deferred tax assets: Net operating losses (federal and state) $ 6 $ 7 Accrued expenses 18 17 Accrued workers' compensation costs 9 8 Recovery credit 2 20 Operating lease liabilities 11 14 Stock based compensation 2 3 Tax benefits relating to uncertain positions 1 1 Tax credits (federal, state and foreign) 7 7 Section 174 Capitalized R&D 21 13 Other 2 3 Total 79 93 Valuation allowance (8) (8) Total deferred tax assets 71 85 Deferred tax liabilities: Depreciation and amortization (48) (54) Prepaid commission expenses (26) (24) Operating lease right-of-use assets (5) (10) Total deferred tax liabilities (79) (88) Net deferred tax liabilities $ (8) $ (3) As of December 31, 2023 and 2022, we have federal net operating loss of $1 million and $2 million, respectively, which can be carried forward indefinitely. We have capital loss carryforwards of $3 million which will expire in 2027. As of December 31, 2023 and 2022, we have various state net operating loss carryforwards of $91 million and $94 million, respectively, most of which, if unused, will expire in years 2024 through 2043. As of December 31, 2023 and 2022, we have state tax credit carryforwards (net of federal benefit) of $5 million that will begin expiring in 2026. In addition, Canada tax credit carryforwards of $2 million will begin expiring in 2037. Valuation Allowance We have recorded a valuation allowance to reflect the estimated amount of deferred tax assets that may not be realized, related to state tax credits, state net operating loss and capital loss carryforwards. A reconciliation of the beginning and ending amount of the valuation allowance is presented in the table below: Year Ended December 31, (in millions) 2023 2022 2021 Valuation allowance at January 1 $ 8 $ 5 $ 5 Charged to net income — 3 — Valuation allowance at December 31 8 8 5 Uncertain Tax Positions A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) related to uncertain income tax provisions, which would affect the effective tax rate if recognized, is presented in the table below: Year Ended December 31, (in millions) 2023 2022 2021 Unrecognized tax benefits at January 1 $ 7 $ 7 $ 8 Additions for tax positions of current period 2 2 1 Reductions for tax positions of prior period: Lapse of applicable statute of limitations (2) (2) (1) Adjustments to tax positions — — (1) Unrecognized tax benefits at December 31 $ 7 $ 7 $ 7 As of December 31, 2023 and 2022, the total amount of gross interest and penalties accrued were immaterial. The unrecognized tax benefit, including accrued interest and penalties, is included in other non-current liabilities on the consolidated balance sheets. It is reasonably possible the amount of the unrecognized benefit could increase or decrease within the next twelve months, which would have an impact on net income. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic EPS is computed based on the weighted average shares of common stock outstanding during the period. Diluted EPS is computed based on those shares used in the basic EPS computation, plus potentially dilutive shares issuable under our equity-based compensation plans using the treasury stock method. Shares that are potentially anti-dilutive are excluded. The following table presents the computation of our basic and diluted EPS attributable to our common stock: Year Ended December 31, (in millions, except per share data) 2023 2022 2021 Net income $ 375 $ 355 $ 338 Weighted average shares of common stock outstanding 57 63 66 Basic EPS $ 6.61 $ 5.66 $ 5.13 Net income $ 375 $ 355 $ 338 Weighted average shares of common stock outstanding 57 63 66 Dilutive effect of stock options and restricted stock units — 1 1 Weighted average shares of common stock outstanding 57 64 67 Diluted EPS $ 6.56 $ 5.61 $ 5.07 Common stock equivalents excluded from income per diluted share because of their anti-dilutive effect 1 2 1 |
401(k) PLAN
401(k) PLAN | 12 Months Ended |
Dec. 31, 2023 | |
Postemployment Benefits [Abstract] | |
401(k) PLAN | 401(k) PLAN The Company maintains a defined contribution 401(k) plan for the benefit of corporate employees. Under our 401(k) plan, eligible employees may elect to contribute based on their eligible compensation. The Company matches a portion of employee contributions, which amounted to $17 million, $14 million, and $15 million for the years ended December 31, 2023, 2022, and 2021, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS We have service agreements with certain stockholders that we process their employees' payrolls and payroll taxes. From time to time, we also enter into sales and purchases agreements with various companies that have a relationship with our executive officers or members of our board of directors. The relationships are typically equity investment firm clients on which a board member serves in an executive role, an equity investment by those firms in a client/vendor company, or other clients/vendors on which our executive officer or board member serves as a member of the client/vendor company's board of directors. We have received $12 million, $16 million, and $14 million in total revenues from such related parties during the years ended December 31, 2023, 2022 and 2021, respectively. We have also entered into various software license agreements with software service providers who have board members in common with us. We paid the software service providers $3 million, $2 million, and $2 million during the years ended December 31, 2023, 2022 and 2021, for services we received, respectively. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS Zenefits On February 15, 2022, the Company acquired all of the outstanding equity of Zenefits, a leading cloud HR platform which provides innovative and intuitive HR, benefits, payroll and employee engagement software purpose-built for small and medium-size businesses. We believe the acquisition of Zenefits and its cloud-based HRIS software allows us to diversify our product and service offerings to all SMBs without using a co-employment model, and enables us to dynamically service SMBs throughout their lifecycle and expand the customers we serve. The Company recorded the acquisition using the acquisition method of accounting for business combinations in accordance with ASC 805 and recognized identifiable assets acquired and liabilities assumed at their fair value as of the date of acquisition. We measure goodwill as the excess of the cash and stock consideration transferred, which we also measure at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The purchase price was as follows: (in millions) Amount Cash and stock consideration per agreement $ 220 Closing adjustments 3 Total consideration payable 223 Less: Unvested Zenefits restricted stock (14) Total purchase price $ 209 The purchase price consisted of cash consideration paid of $192 million and 193,221 shares of TriNet common stock with a fair value of $17 million. In accordance with the merger agreement, certain holders of Zenefits stock received cash in lieu of stock. Holders of unvested Zenefits restricted stock received their pro-rata share of the consideration, payable in cash quarterly over 18 months, and was generally forfeited if the employee terminated service prior to vesting. This amount will be recorded as G&A expense over the 18-month service period. Acquisition-related costs are recorded as G&A expense for the years ended December 31, 2023 and 2022 and were not material. The following table summarizes the fair value of the net assets acquired and allocation of the purchase price: (in millions) Amount Total purchase price $ 209 Asset Acquired: Cash $ 4 Restricted cash 5 Accounts receivable, net 4 Intangible assets 96 Operating lease right-of-use asset 9 Deferred tax asset 2 Other assets 5 Total assets acquired 125 Liabilities Assumed Accounts payable and other current liabilities $ 9 Deferred revenue 13 Operating lease liabilities 15 Deferred taxes 18 Total liabilities assumed 55 Net assets acquired $ 70 Goodwill at acquisition $ 139 Measurement period adjustments (3) Goodwill at December 31, 2022 $ 136 Goodwill represents future economic benefits we expect to achieve as a result of the acquisition, including revenue and cost synergies from our complementary business models. The results of Zenefits have been included in our consolidated financial statements since the closing of the acquisition. Pro forma financial information was not presented because the effect of the acquisition was not material to our results of operations and financial condition. The goodwill associated with the acquisition is not deductible for income tax purposes. The intangible assets acquired were as follows: (in millions) Amount Estimated Useful Life Acquired technology $ 56 6 years Customer relationships 40 7 years Total intangible assets $ 96 Clarus R+D On September 1, 2022, the Company acquired all of the shares outstanding of Clarus R+D, a provider of technology enabled tax expertise and services to SMBs claiming state and federal R&D tax credits. We believe the acquisition of Clarus R+D and its cloud-based software will allow us to provide additional services to our PEO Services and HCM Cloud Services customers. The Company recorded the acquisition using the acquisition method of accounting for business combinations in accordance with ASC 805 and recognized identifiable assets acquired and liabilities assumed at their fair value as of the date of acquisition. We measure goodwill as the excess of the cash and stock consideration transferred, which we also measure at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Annual Report on Form 10-K and may change over the measurement period as the analysis of the assets acquired and liabilities assumed is finalized and additional information is received. The measurement period has ended as of December 31, 2023. The total purchase price consisted of cash consideration paid of $48 million. Acquisition-related costs are recorded as G&A expense for the years ended December 31, 2023 and 2022 and were not material. In connection with the acquisition, we issued an immaterial amount of RSUs to the Clarus R+D employees who are required to provide ongoing services to vest. The following table summarizes the fair value of the net assets acquired and preliminary allocation of the purchase price: (in millions) Amount Total purchase price $ 48 Asset Acquired: Cash $ 3 Accounts receivable, net 3 Intangible assets 14 Total assets acquired 20 Liabilities Assumed Accounts payable and other current liabilities $ 1 Deferred taxes 3 Total liabilities assumed 4 Net assets acquired $ 16 Goodwill at acquisition $ 32 Goodwill at December 31, 2022 $ 32 Goodwill represents future economic benefits we expect to achieve as a result of the acquisition, including revenue and cost synergies from our complementary business models. The results of Clarus R+D have been included in our consolidated financial statements since the closing of the acquisition. Pro forma financial information was not presented because the effect of the acquisition was not material to our results of operations and financial condition. The goodwill associated with the acquisition is not deductible for income tax purposes. The intangible assets acquired were as follows: (in millions) Amount Estimated Useful Life Acquired technology $ 9 6 years Customer relationships 5 3 - 5 years Total intangible assets $ 14 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 375 | $ 355 | $ 338 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Paul Chamberlain [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On November 6, 2023, Paul Chamberlain, a member of the Board of Directors, adopted a new written trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (the “Chamberlain Plan”). The first possible trade date under the Chamberlain Plan is February 20, 2024, and the end date of the Chamberlain Plan is November 10, 2024 (subject to customary exceptions), for a duration of approximately one year. The Chamberlain Plan provides for the sale of up to 2,875 shares of the Company’s common stock. | |
Name | Paul Chamberlain | |
Title | member of the Board of Directors | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | November 6, 2023 | |
Arrangement Duration | 264 days | |
Aggregate Available | 2,875 | 2,875 |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Segment Information | We operate in one reportable segment. All of our service revenues are generated from external clients. Less than 1% of our revenue is generated outside of the U.S. |
Basis of Presentation | Our consolidated financial statements are prepared in conformity with generally accepted accounting principles in the United States of America (GAAP). All intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts within operating activities of the Consolidated Statement of Cash Flows have been reclassified to conform to current period presentation. In particular, the amortization of deferred costs, consisting of costs to obtain contracts with customers, cloud computing implementation and debt issuance costs, were previously included in depreciation and amortization and are now separately classified as Amortization of Deferred Costs. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect certain reported amounts and related disclosures. These estimates are based on historical experience and on various other assumptions that we believe to be reasonable from the facts available to us. Some of the assumptions are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, our consolidated financial statements could be materially affected. |
Revenue Recognition | Revenues are recognized when the promised services are transferred to our clients, in an amount that reflects the consideration that we expect to receive in exchange for services. We generate all of our revenue from contracts with clients. We disaggregate revenues into professional services revenues and insurance services revenues as reported on the consolidated statements of income and comprehensive income. In the majority of our contracts, both the client and the Company may terminate the contract without penalty by providing a 30-day notice. Performance Obligations At contract inception, we assess the services promised in our contracts with clients and identify a performance obligation for each distinct promise to transfer to the client a service or bundle of services. We determined that the following distinct services represent separate performance obligations: • Payroll and payroll tax processing, • Health benefits services, • Workers’ compensation services, and • A right to receive future services at a discount through a Recovery Credit. Payroll and payroll tax processing performance obligations include services to process payroll and payroll tax-related transactions on behalf of our PEO and HRIS clients. Revenues associated with this performance obligation are reported as professional service revenues and recognized using an output method in which the promised services are transferred when a client's payroll is processed by us and WSEs and users are paid. Professional service revenues are stated net of the gross payroll and payroll tax amounts funded by our clients. Although we assume the responsibilities to process and remit the payroll and payroll related obligations, we do not assume employment-related responsibilities such as determining the amount of the payroll and related payroll obligations. As a result, we are the agent in this arrangement for revenue recognition purposes. Health benefits and workers' compensation services include performance obligations to provide TriNet-sponsored health benefits and workers' compensation insurance coverage through insurance policies provided by third-party insurance carriers and settle deductible amounts on those policies. Revenues associated with these performance obligations are reported as insurance services revenues and are recognized using the output method over the period of time that the client and WSEs are covered under TriNet-sponsored insurance policies. We control the selection of health benefits and workers' compensation coverage made available. As a result, we are the principal in this arrangement for revenue recognition purposes and insurance services revenues are reported gross. We generally charge new clients a nominal upfront non-refundable fee to recover our costs to set them up on our TriNet platform for payroll processing and other administrative services, such as benefit enrollments. These fees are accounted for as part of our transaction price and are allocated among the performance obligations based on their relative standalone selling prices. Client Deposits and Other Client Liabilities Client deposits and other client liabilities represents our contractual commitments and payables to clients, including indemnity guarantee payments received from clients, amounts prefunded by clients for their payroll and related taxes and other withholding liabilities before payroll is processed or due for payment, as well as service fee consideration received for unsatisfied performance obligations. Variable Consideration and Pricing Allocation From time to time, we may offer credits to our clients considered to be variable consideration. Incentive credits related to contract renewals are recorded as a reduction to revenue as part of the transaction price at contract inception and are allocated among the performance obligations based on their relative standalone selling prices. We allocate the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. The transaction price for the payroll and payroll tax processing performance obligations is determined upon establishment of the contract that contains the final terms of the arrangement, including the description and price of each service purchased. The estimated service fee is determined based on observable inputs and includes the following key assumptions: target profit margin, pricing strategies including the mix of services purchased and competitive factors, and client and industry specifics. The fees for access to health benefits and workers' compensation insurance performance obligations is determined during the new client on-boarding and enrollment processes based on the types of benefits coverage the WSEs have elected and the applicable risk profile of the client. We estimate our service fees based on actuarial forecasts of our expected insurance premiums and loss sensitive premium costs and amounts to cover our costs to administer these programs. We require our clients to prefund payroll and related taxes and other withholding liabilities before payroll is processed or due for payment. Under the provision of our contracts with clients, we generally will process the payment of a client’s payroll only when the client successfully funds the amount required. As a result, there is no financing arrangement for the contracts. However, certain contracts to provide payroll and payroll tax processing services permit the client to pay certain payroll tax components ratably over periods of up to 12 months rather than as payroll tax is otherwise determined and due, which may be considered a significant financing arrangement under FASB ASC Topic 606 Revenue from Contracts with Customers. However, as the period between our performing the service under the contract and when the client pays for the service is less than one year, we have elected, as a practical expedient, not to adjust the transaction price. Unbilled Revenue For our PEO clients, we recognize WSE payroll and payroll tax liabilities in the period in which the WSEs perform work. When clients' pay periods cross reporting periods, we accrue the portion of the unpaid WSE payroll where we assume, under state regulations, the obligation for the payment of wages and the corresponding payroll tax liabilities associated with the work performed prior to period-end. These estimated payroll and payroll tax liabilities are recorded in accrued wages. The associated receivables, including estimated revenues, offset by advance collections from clients and an allowance for credit losses, are recorded as unbilled revenue. As of December 31, 2023 and 2022, advance collections included in unbilled revenue were $8 million and $9 million, respectively. Contract Costs |
Insurance Costs | Our insurance plans are provided by third-party insurance carriers under risk-based or guaranteed-cost insurance policies. Under risk-based policies, we agree to reimburse our carriers for any claims paid within an agreed-upon per-person deductible layer up to a maximum aggregate exposure limit per policy. These deductible dollar limits and maximum limits vary by carrier and year. Under guaranteed-cost policies, our carriers establish the premiums and we are not responsible for any deductible. Insurance costs include insurance premiums for coverage provided by insurance carriers, expenses for claims costs and other risk management and administrative services, reimbursement of claims payments made by insurance carriers or third-party administrators below a predefined deductible limit, and changes in accrued costs related to contractual obligations with our workers' compensation and health benefit carriers. At policy inception, annual workers' compensation premiums are estimated by the insurance carriers based on projected wages over the duration of the policy period and the risk categories of the WSEs. We initially pay premiums based on these estimates. As actual wages are realized, premium expense recorded may differ from estimated premium expense, creating an asset or liability throughout the policy year. Such asset or liability is reported on our consolidated balance sheets as prepaid expenses or insurance premiums and other payables, respectively. |
Accrued Workers' Compensation Costs & Accrued Health Insurance Costs | We have secured workers' compensation insurance policies with insurance carriers to administer and pay claims for our clients and WSEs. We are responsible for reimbursing the insurance carriers for losses up to $1 million per claim occurrence (deductible layer). Insurance carriers are responsible for administering and paying claims. We are responsible for reimbursing each carrier up to a deductible limit per occurrence. Accrued workers' compensation costs represent our liability to reimburse insurance carriers for our share of their losses and loss adjustment expenses. These accrued costs are established to provide for the estimated ultimate costs of paying claims within the deductible layer in accordance with workers' compensation insurance policies. These accrued costs include estimates for reported and incurred but not reported (IBNR) losses, accrued costs on reported claims, and expenses associated with settling the claims. In establishing these accrued costs, we use an external actuary to provide an estimate of undiscounted future cash payments that would be made to settle the claims based upon: • historical loss experience, exposure data, and industry loss experience related to TriNet’s insurance policies, • inputs including WSE job responsibilities and location, • historical volume and severity of workers' compensation claims, • an estimate of future cost trends, • expected loss ratios for the latest accident year or prior accident years, adjusted for the loss trend, the effect of rate changes and other quantifiable factors, and • loss development factors to project the reported losses for each accident year to an ultimate basis. We assess the accrued workers' compensation costs on a quarterly basis. For each reporting period, changes in the actuarial methods and assumptions resulting from changes in actual claims experience and other trends are incorporated into the accrued workers' compensation costs. Adjustments to previously established accrued costs estimates are reflected in the results of operations for the period in which the adjustment is identified. Such adjustments could be significant, reflecting any variety of new adverse or favorable trends. Accordingly, final claim settlements may vary materially from the present estimates, particularly when those payments may not occur until well into the future. In our experience, plan years related to workers' compensation programs may take ten years or more to be settled. We do not discount accrued workers' compensation costs. Costs expected to be paid within one year are recorded as accrued workers' compensation costs. Costs expected to be paid beyond one year are included in accrued workers' compensation costs, less current portion. We have collateral agreements with various insurance carriers where either we retain custody of funds in trust accounts which we record as restricted cash and cash equivalents, or remit funds to carriers. Collateral whether held by us, or the carriers, is used to settle our insurance and claim deductible obligations to them. Collateral requirements are established at the policy year and are re-assessed by each carrier annually. Based on the results of each assessment, additional collateral may be required for or paid to the carrier or collateral funds may be released or returned to the Company. In instances where we pay collateral to carriers and the agreement permits net settlement of obligations against collateral held, we record our accrued costs net of that collateral (Carrier Collateral Offset). We offset Carrier Collateral Offset against our obligation due within the next 12 months before applying against long-term obligations. Collateral balances in excess of accrued costs are recorded in other assets. Accrued Health Insurance Costs We sponsor and administer a number of employee benefit plans for our PEO WSEs, including group health, dental, and vision as an employer plan sponsor under section 3(5) of the ERISA. In 2023, the majority of our group health insurance costs related to risk-based plans. Our remaining group health insurance costs were for guaranteed-cost policies. Accrued health insurance costs are established to provide for the estimated unpaid costs of reimbursing the carriers for paying claims within the deductible layer in accordance with risk-based health insurance policies. These accrued costs include estimates for claims incurred but not paid. We assess accrued health insurance costs regularly based upon actuarial studies that include other relevant factors such as current and historical claims payment patterns, plan enrollment and medical trend rates. In certain carrier contracts we are required to prepay our obligations for the expected claims activity for subsequent periods. These prepaid balances by agreement permit net settlement of obligations and offset the accrued health insurance costs. As of December 31, 2023 and 2022, prepayments and miscellaneous receivables offsetting accrued health insurance costs were $58 million and $57 million, respectively. When the prepaid amount is in excess of our recorded liability the net asset position is included in prepaid expenses. As of December 31, 2023 and 2022, accrued health insurance costs offsetting prepaid expenses were $68 million and $73 million, respectively. |
Leases | We determine if a new contractual arrangement is a lease at contract inception. If a contract contains a lease, we evaluate whether it should be classified as an operating or a finance lease. If applicable as a lease, we record our lease liabilities and right-of-use (ROU) assets based on the future minimum lease payments over the lease term and only include options to renew a lease in the future minimum lease payments if it is reasonably certain that we will exercise that option. For certain leases with original terms of twelve months or less we recognize the lease expense as incurred and we do not recognize lease liabilities and ROU assets. We measure our lease liabilities based on the future minimum lease payments discounted over the lease term. We determine our discount rate at lease inception using our incremental borrowing rate, which is based on our outstanding debts that are collateralized by certain corporate assets. As of December 31, 2023 and 2022, the weighted-average rate used in discounting the lease liability was 4.2% and 3.9%, respectively. |
Cash and Cash Equivalents | Cash and cash equivalents include bank deposits and short-term, highly liquid investments. Investments with original maturity dates of three months or less are considered cash equivalents. |
Restricted Cash, Cash Equivalents and Investments | Restricted cash, cash equivalents and investments presented on our consolidated balance sheets include: • cash and cash equivalents in trust accounts functioning as security deposits for our insurance carriers, • payroll funds collected representing cash collected in advance from clients which we designate as restricted for the purpose of funding WSE payroll and payroll taxes and other payroll related liabilities, and • amounts held in trust for current and future premium and claim obligations with our insurance carriers, which amounts are held in trust according to the terms of the relevant insurance policies and by the local insurance regulations of the jurisdictions in which the policies are in force. |
Investments | Our marketable investments are primarily classified as available-for-sale and are carried at estimated fair value. Unrealized gains and losses are reported as a component of accumulated other comprehensive income, net of deferred income taxes. The amortized cost of debt investments is adjusted for amortization of premiums and accretion of discounts from the date of purchase to the earliest call date for premiums or the maturity date for discounts. Such amortization is included in interest income as an addition to or deduction from the coupon interest earned on the investments. We use the specific identification method to determine realized gains and losses on the sale of available-for-sale securities. Realized gains and losses are included in interest expense, bank fees, and other in the accompanying consolidated statements of income and comprehensive income. We assess our investments for credit impairment. We review several factors to determine whether an unrealized loss is credit related, such as financial condition and future prospects of the issuer. To the extent that a security's amortized cost basis exceeds the present value of the cash flows expected to be collected from the security, an allowance for credit losses will be recognized. If management intends to sell or will more likely than not be required to sell the security before any anticipated recovery, a write down will be recognized in earnings measured as the entire difference between the amortized cost and the then-current fair value. We have investments within our unrestricted and our restricted accounts. Unrestricted investments are recorded on the balance sheet as current or noncurrent based upon the remaining time to maturity, and investments subject to restrictions are classified as current or noncurrent based on the expected payout of the related liability. |
Comprehensive Income | Comprehensive income consists of net income and other comprehensive income. Other comprehensive (loss) income includes those gains and losses included in comprehensive income, but excluded from net income, in accordance with GAAP. Other comprehensive (loss) income is primarily comprised of net unrealized gains or losses arising on available-for-sale investments, net of deferred taxes. |
Fair Value of Financial Instruments | Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. Our financial assets recorded at fair value on a recurring basis are comprised of cash equivalents, available-for-sale marketable securities and certificates of deposits. We measure certain financial assets at fair value for disclosure purposes, as well as on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. Our other current financial assets and liabilities have fair values that approximate their carrying value due to their short-term nature. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market to measure fair value, summarized as follows: • Level 1—observable inputs for identical assets or liabilities, such as quoted prices in active markets, • Level 2—inputs other than the quoted prices in active markets that are observable either directly or indirectly, • Level 3—unobservable inputs in which there is little or no market data, which requires that we develop our own assumptions. The fair value hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We classify our cash equivalents, investments and long-term debt in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety. |
Accounts Receivable | Our accounts receivable represents outstanding gross billings to clients, net of an allowance for estimated credit losses. We require our clients to prefund payroll and related liabilities before payroll is processed or due for payment. If a client fails to fund payroll or misses the funding cut-off, at our sole discretion, we may pay the payroll and the resulting amounts due to us are recognized as accounts receivable. When client payment is received in advance of our performance under the contract, such amount is recorded as client deposits. We establish an allowance for credit losses based on the credit quality of clients, current economic conditions, the age of the accounts receivable balances, historical experience, and other factors that may affect clients’ ability to pay, and charge-off amounts against the allowance when they are deemed uncollectible. |
Property and Equipment | We record property and equipment at historical cost and compute depreciation using the straight-line method over the estimated useful lives of the assets or the lease terms, generally five years to seven years for office equipment, furniture and fixtures, and the shorter of the asset life or the remaining lease term for leasehold improvements. We expense the cost of maintenance and repairs as incurred and capitalize leasehold improvements. |
Internal-use Software | We periodically assess the likelihood of unsuccessful completion of projects in progress, as well as monitor events or changes in circumstances, which might suggest that impairment has occurred, and recoverability should be evaluated. An impairment loss is recognized if the carrying amount of the asset is not recoverable and exceeds the future net cash flows expected to be generated by the asset. |
Impairment or Disposal of Long-Lived Assets | We evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An asset is considered impaired if the carrying amount exceeds the undiscounted future net cash flows the asset is expected to generate. An impairment charge is recognized for the amount by which the carrying amount of the assets exceeds its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less selling costs. |
Goodwill, Software and Other Intangible Assets | Our goodwill and identifiable intangible assets with indefinite useful lives are not amortized but are tested for impairment on an annual basis or when an event occurs or circumstances change in a way to indicate that there has been a potential decline in the fair value of the reporting unit. Goodwill impairment is determined by comparing the estimated fair value of the reporting unit to its carrying amount, including goodwill. All goodwill is associated with one reporting unit within our one reportable segment. Annually, we perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit has declined below its carrying value. This assessment considers various financial, macroeconomic, industry, and reporting unit specific qualitative factors. We perform our annual impairment testing in the fourth quarter. Based on the results of our reviews, no impairment loss was recognized in the results of operations for the years ended December 31, 2023, 2022 and 2021. Intangible assets and software with finite useful lives are amortized over their respective estimated useful lives ranging from one year to ten years using either the straight-line method or an accelerated method. Intangible assets are reviewed for indicators of impairment at least annually and evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We capitalize internal and external costs incurred to develop internal-use computer software during the application development stage. Application development stage costs include software configuration, coding, and installation. Capitalized costs are amortized on a straight-line basis over the estimated useful life, typically ranging from three years to six years, commencing when the software is placed into service. We expense costs incurred during the preliminary project stage, as well as general and administrative, overhead, maintenance and training costs, and costs that do not add functionality to existing systems. |
Advertising Costs | We expense the costs of producing advertisements at the time production occurs, and expense the cost of running advertisements in the period in which the advertising space or airtime is used as sales and marketing expense. |
Stock-Based Compensation | Our stock-based awards to employees include time based and performance based restricted stock units and restricted stock awards, stock options and an employee stock purchase plan. Compensation expense associated with restricted stock units and restricted stock awards is based on the fair value of common stock on the date of grant. Compensation expense associated with stock options and employee stock purchase plan are based on the estimated grant date fair value method using the Black-Scholes option pricing model. Expense is recognized using a straight-line amortization method over the respective vesting period for awards that are ultimately expected to vest, with adjustments to expense recognized in the period in which forfeitures occur. |
Income Taxes | We account for our provision for income taxes using the asset and liability method, under which we recognize income taxes payable or refundable for current year and deferred tax assets and liabilities for the future tax effect of events that have been recognized in either our financial statements or tax returns. We measure our current and deferred tax assets and liabilities based on provision of enacted tax laws of those jurisdictions in which we operate. The effect of changes in tax laws and regulations, or interpretations, is recognized in our consolidated financial statements in the period that includes the enactment date. We recognize deferred tax assets and liabilities based on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes, as well as the expected benefits of using net operating loss and other carryforwards. We establish a valuation allowance when it is determined more likely than not that the deferred tax assets will not be realized. Provision for income taxes may change when estimates used in determining valuation allowances change or when receipt of new information indicates the need for adjustment in valuation allowances. Changes in valuation allowances are reflected as a component of the provision for income taxes in the period of adjustment. |
Concentrations of Credit Risk | Financial instruments subject to concentrations of credit risk include cash, cash equivalents and investments (unrestricted and restricted), accounts receivable, and amounts due from insurance carriers. We maintain these financial assets principally in domestic financial institutions. We perform periodic evaluations of the relative credit standing of these institutions. Our exposure to credit risk in the event of default by the financial institutions holding these funds is limited to amounts currently held by the institution in excess of insured amounts. Under the terms of professional services agreements, clients agree to maintain sufficient funds or other satisfactory credit at all times to cover the cost of their current payroll, all accrued paid time off, vacation or sick leave balances, and other vested wage and benefit obligations for all their work site employees. We generally require payment from our clients on or before the applicable payroll date. |
Recent Accounting Pronouncements | Recently adopted accounting guidance Recognizing and Measuring Contract Assets and Contract Liabilities From Contracts With Customers Acquired in a Business Combination – We early adopted ASU 2021-08 – Business Combinations (Topic 805) effective January 1, 2022. ASU 2021-08 amends ASC 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and requires that we recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with FASB ASC Topic 606 Revenue from Contracts with Customers. The adoption of ASU 2021-08 did not have a material effect on our financial statements. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Change in Balance of the Recovery Credit Unsatisfied Performance Obligation | The change in balance for the liability for credits previously accrued is the following: (in millions) 2023 2022 Balance at beginning of period $ 75 $ 48 (+) Accruals — 75 (-) Distributions to clients (68) (48) Balance at end of period $ 7 $ 75 |
Schedule of Capitalized Contract Cost | The below table summarizes the amounts capitalized and amortized during the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (in millions) 2023 2022 2021 Deferred commission expense: Capitalized $ 33 $ 32 $ 28 Amortized 35 31 25 |
CASH, CASH EQUIVALENTS AND IN_2
CASH, CASH EQUIVALENTS AND INVESTMENTS - UNRESTRICTED AND RESTRICTED (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash, Cash Equivalents and Investments | Our total cash, cash equivalents and investments are summarized below: December 31, 2023 December 31, 2022 (in millions) Cash and cash equivalents Available-for-sale marketable securities Total Cash and cash equivalents Available-for-sale marketable securities Total Cash and cash equivalents $ 287 $ — $ 287 $ 354 $ — $ 354 Investments — 65 65 — 76 76 Restricted cash, cash equivalents and investments Payroll funds collected 1,067 — 1,067 1,062 — 1,062 Collateral for health benefits claims 31 113 144 29 110 139 Collateral for workers' compensation claims 54 2 56 58 — 58 Other security deposits 2 — 2 4 — 4 Total restricted cash, cash equivalents and investments 1,154 115 1,269 1,153 110 1,263 Investments, noncurrent — 143 143 — 151 151 Restricted cash, cash equivalents and investments, noncurrent Collateral for workers' compensation claims 25 133 158 27 123 150 Other security deposits — — — 3 — 3 Total $ 1,466 $ 456 $ 1,922 $ 1,537 $ 460 $ 1,997 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Financial Instruments by Significant Categories and Fair Value Measurement on a Recurring Basis | The following tables summarize our financial instruments by significant categories and fair value measurement on a recurring basis as of December 31, 2023 and December 31, 2022 and the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of our AFS investments: (in millions) Fair Value Level Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Investments Restricted Cash, Cash Equivalents and Investments December 31, 2023 Cash equivalents: Money market mutual funds Level 1 $ 183 $ — $ — $ 183 $ 96 $ — $ 87 U.S. treasuries Level 2 7 — — 7 5 — 2 Total cash equivalents 190 — — 190 101 — 89 AFS Investments: Asset-backed securities Level 2 41 — (1) 40 — 40 — Corporate bonds Level 2 135 1 — 136 — 103 33 Agency securities Level 2 40 — (1) 39 — 10 29 U.S. treasuries Level 2 231 1 (1) 231 — 47 184 Certificate of deposit Level 2 2 — — 2 — — 2 Other debt securities Level 2 8 — — 8 — 8 — Total AFS Investments $ 457 $ 2 $ (3) $ 456 $ — $ 208 $ 248 (in millions) Fair Value Level Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Investments Restricted Cash, Cash Equivalents and Investments December 31, 2022 Cash equivalents: Money market mutual funds Level 1 $ 314 $ — $ — $ 314 $ 225 $ — $ 89 U.S. treasuries Level 2 18 — — 18 18 — — Total cash equivalents 332 — — 332 243 — 89 AFS Investments: Asset-backed securities Level 2 42 — (2) 40 — 40 — Corporate bonds Level 2 140 — (1) 139 — 112 27 Agency securities Level 2 33 — (1) 32 — 5 27 U.S. treasuries Level 2 229 — — 229 — 62 167 Certificate of deposit Level 2 12 — — 12 — — 12 Other debt securities Level 2 8 — — 8 — 7 1 Total AFS Investments $ 464 $ — $ (4) $ 460 $ — $ 226 $ 234 |
Schedule of Fair Value of Debt Investments by Contractual Maturity | The fair value of debt investments by contractual maturity are shown below: (in millions) December 31, 2023 One year or less $ 93 Over one year through five years 332 Over five years through ten years 11 Over ten years 20 Total fair value $ 456 |
Schedule of Proceeds from Available-for-sale Securities | The gross proceeds from sales and maturities of AFS securities for the years ended December 31, 2023, 2022, and 2021 are presented below. We had immaterial gross realized gains and losses from sales of investments for the year ended December 31, 2021. Year Ended December 31, (in millions) 2023 2022 2021 Gross realized losses $ (1) $ (18) $ — Gross proceeds from sales 150 227 162 Gross proceeds from maturities 137 253 187 Total $ 286 $ 462 $ 349 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net, consists of the following: (in millions) December 31, 2023 December 31, 2022 Office equipment, including data processing equipment $ 37 $ 36 Leasehold improvements 19 21 Furniture, fixtures, and equipment 14 16 Projects in progress 2 4 Total 72 77 Less: Accumulated depreciation (55) (50) Less: Impairments (1) $ — (3) Property and equipment, net $ 17 $ 24 (1) Amount includes impairment of leasehold improvements in leased office space that we have exited. Refer to Note 7 in Part II, Item 8. Financial Statements and Supplementary Data, of this Form 10-K. |
GOODWILL, SOFTWARE AND OTHER _2
GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | Changes in goodwill for the years ended December 31, 2023 and 2022 are as follows: (in millions) Amount Balance at December 31, 2021 $ 294 Additions 168 Balance at December 31, 2022 $ 462 Additions — Balance at December 31, 2023 $ 462 |
Schedule of Software and Other Intangible Assets | The following summarizes software and other intangible assets: December 31, 2023 December 31, 2022 (in millions) Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangibles: Software 3 years 350 (255) 95 278 (213) 65 Customer relationships 6 years 49 (18) 31 135 (93) 42 Developed technology 6 years 65 (19) 46 65 (9) 56 Total $ 464 $ (292) $ 172 $ 478 $ (315) $ 163 |
Schedule of Capitalized Internally Developed Software Costs and Depreciation Expense | The following table summarizes our capitalized internally developed software costs and related depreciation expense. Year Ended December 31, (in millions) 2023 2022 2021 Capitalized internally developed software costs 69 48 33 Depreciation expense for capitalized internally developed software costs 42 35 33 |
Schedule of Expected Expense Related to Intangibles Amortization in Future Periods | Expense related to intangibles amortization in future periods as of December 31, 2023 is expected to be as follows: Year ending December 31: Amount 2024 $ 59 2025 46 2026 31 2027 23 2028 7 2029 and thereafter 3 Total $ 169 |
ACCRUED WORKERS' COMPENSATION_2
ACCRUED WORKERS' COMPENSATION COSTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Insurance [Abstract] | |
Schedule of Activities for Unpaid Claims, Claims Adjustment Expenses and Workers' Compensation Liabilities | The following table summarizes the accrued workers’ compensation cost activity for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (in millions) 2023 2022 2021 Total accrued costs, beginning of year $ 189 $ 198 $ 205 Incurred Current year 66 68 66 Prior years (36) (32) (23) Total incurred 30 36 43 Paid Current year (10) (10) (10) Prior years (34) (35) (40) Total paid (44) (45) (50) Total accrued costs, end of year $ 175 $ 189 $ 198 The following tables summarize workers' compensation liabilities on the consolidated balance sheets: (in millions) December 31, 2023 December 31, 2022 Total accrued costs, end of year $ 175 $ 189 Collateral paid to carriers and offset against accrued costs (5) (7) Total accrued costs, net of carrier collateral offset $ 170 $ 182 Payable in less than 1 year (net of collateral paid to carriers of $1 and $2 as of December 31, 2023 and 2022, respectively) $ 50 54 Payable in more than 1 year (net of collateral paid to carriers of $4 and $5 as of December 31, 2023 and 2022, respectively) 120 128 Total accrued costs, net of carrier collateral offset $ 170 $ 182 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Payments | Future minimum lease payments as of December 31, 2023 were as follows: (in millions) December 31, 2023 2024 $ 15 2025 13 2026 8 2027 7 2028 5 2029 and thereafter — Total future minimum lease payments $ 48 Less: imputed interest (4) Total operating lease liabilities $ 44 Current portion 14 Non-current portion 30 |
LONG-TERM DEBT AND REVOLVING _2
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Line of Credit Facility [Abstract] | |
Schedule of Long-term Debt and Revolving Credit Agreement Borrowings | The following table summarizes our long-term debt and revolving credit agreement borrowings as of December 31, 2023 and 2022. (Dollars in millions) Annual contractual interest rate Effective interest rate Principal amount Deferred issuance costs Less: current portion Long-term debt, noncurrent December 31, 2023 December 31, 2022 2021 Revolver 6.58 % 7.07 % $ 200 $ — $ (109) $ 91 $ — 2029 Notes 3.50 % 3.67 % $ 500 $ (3) $ — $ 497 $ 496 2031 Notes 7.13 % 7.30 % $ 400 $ (4) $ — $ 396 $ — |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity Under Equity-Based Plans | The following table summarizes stock option activity for the year ended December 31, 2023: Number Weighted Weighted (in years) Aggregate Balance at December 31, 2022 190,275 $ 20.50 1.5 $ 9 Exercised (182,067) 20.50 14 Balance at December 31, 2023 (1) 8,208 $ 19.50 0.45 $ 1 (1) All options are vested and exercisable. |
Schedule of Additional Disclosure for Stock Options | Year Ended December 31, Additional Disclosures for Stock Options (in millions) 2023 2022 2021 Total intrinsic value of options exercised 14 8 6 Cash received from options exercised 4 1 1 |
Schedule of RSU and RSA Activity Under Equity-Based Plans | The following tables summarize RSU activity for the year ended December 31, 2023: Time-based RSUs Total Number of RSUs Weighted-Average Grant Date Fair Value Nonvested at December 31, 2022 1,198,561 $ 80.75 Granted 769,286 78.27 Vested (617,937) 76.25 Forfeited (120,708) 82.58 Nonvested at December 31, 2023 1,229,202 $ 80.88 Year Ended December 31, Additional Disclosures for equity-based plans 2023 2022 2021 Total grant date fair value of shares granted (in millions) $ 60 $ 85 $ 47 Total grant date fair value of shares vested (in millions) $ 47 $ 42 $ 34 Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees 213,569 204,191 207,603 Performance-based RSUs Total Number Shares Weighted-Average Grant Date Fair Value Nonvested at December 31, 2022 202,586 $ 86.82 Granted 177,067 79.05 Vested (156,642) 86.22 Nonvested at December 31, 2023 223,011 $ 81.08 |
Schedule of Additional Disclosures for Equity-Based Plans | Year Ended December 31, Additional Disclosures for equity-based plans 2023 2022 2021 Total grant date fair value of shares granted (in millions) (1) $ 14 $ 20 $ 16 Total grant date fair value of shares vested (in millions) $ 14 $ 17 $ 8 Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees 74,923 119,901 77,787 (1) Amount includes fair value of finalized additional grant related to the most recently ended performance period. |
Schedule of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options | In applying the Black Scholes option valuation model for the ESPP options, we use the following assumptions: Year Ended December 31, (in millions) 2023 2022 2021 Expected Term (in Years) 0.5 0.5 0.5 Expected Volatility 29-35% 21-39% 21-35% Risk-Free Interest Rate 5.3-5.4% 0.7-4.5% 0.4-0.7% Expected Dividend Yield 0 % 0 % 0 % Shares Issued under ESPP 175,446 158,134 136,861 |
Schedule of Stock-based Compensation Expense | Stock based compensation expense and other disclosures for stock based awards made to our employees pursuant to the equity plans were as follows: Year Ended December 31, (in millions) 2023 2022 2021 Cost of providing services $ 14 $ 13 $ 12 Sales and marketing 8 7 6 General and administrative 33 38 29 Systems development and programming costs 4 4 3 Total stock based compensation expense $ 59 $ 62 $ 50 Total stock based compensation capitalized $ 3 $ 1 $ 1 Income tax benefit related to stock based compensation expense $ 13 $ 13 $ 10 Tax benefit realized $ 19 $ 14 $ 16 The table below summarizes unrecognized compensation expense for the year ended December 31, 2023 associated with the following: Amount Weighted-Average Period (in Years) Nonvested time based RSUs $ 92 2.47 Nonvested performance based RSUs 10 1.66 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Common Stock | The following table shows the beginning and ending balances of our issued and outstanding common stock for the year ended December 31, 2023, 2022, and 2021: Year Ended 2023 2022 2021 Shares issued and outstanding, beginning balance 60,555,661 65,968,224 66,456,663 Issuance of common stock from vested restricted stock units 774,579 841,861 748,881 Issuance of common stock from exercise of stock options 182,067 116,592 73,118 Issuance of common stock for employee stock purchase plan 175,446 158,134 136,861 Issuance of common stock for the acquisition of Zenefits — 193,221 — Repurchase of common stock (10,734,790) (6,398,279) (1,161,909) Awards effectively repurchased for required employee withholding taxes (288,492) (324,092) (285,390) Shares issued and outstanding, ending balance 50,664,471 60,555,661 65,968,224 |
Schedule of Stock Repurchase | The following table summarizes the share repurchases under this program for the years ended December 31, 2023, 2022 and 2021: Year Ended 2023 2022 2021 Total cost (in millions) $ 1,112 $ 519 $ 94 Total shares 10,734,790 6,398,279 1,161,909 Average price per share $ 103.59 $ 81.07 $ 81.13 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following: Year Ended December 31, (in millions) 2023 2022 2021 Current: Federal $ 96 $ 112 $ 86 State 24 36 28 Foreign 2 — 1 Total Current 122 148 115 Deferred: Federal 1 (17) (7) State 3 (6) (3) Foreign — 2 (2) Total Deferred 4 (21) (12) Total $ 126 $ 127 $ 103 |
Schedule of U.S. Federal Statutory Income Tax Rate Reconciled to Effective Tax Rate | The U.S. federal statutory income tax rate reconciled to our effective tax rate is as follows: Year Ended December 31, 2023 2022 2021 (in millions, except percent) Pre-Tax Income Tax Expense/(Benefit) Percent of Pre-Tax Income (Loss) Pre-Tax Income Tax Expense/(Benefit) Percent of Pre-Tax Income (Loss) Pre-Tax Income Tax Expense/(Benefit) Percent of Pre-Tax Income (Loss) $ 501 $ 482 $ 441 U.S. federal statutory tax rate $ 105 21 % $ 101 21 % $ 93 21 % State income taxes, net of federal benefit 34 7 34 7 32 7 Tax rate change 1 — — — (1) — Nondeductible meals, entertainment and penalties 2 — 3 1 2 — Stock based compensation (2) — 3 1 (2) — Uncertain tax positions — — — — (1) — Tax credits (6) (1) (8) (2) (7) (2) State and tax return to provision adjustments (11) (2) (9) (2) (10) (2) Other 3 — 3 — (3) (1) Total $ 126 25 % $ 127 26 % $ 103 23 % |
Schedule of Significant Components of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities are as follows: Year Ended December 31, (in millions) 2023 2022 Deferred tax assets: Net operating losses (federal and state) $ 6 $ 7 Accrued expenses 18 17 Accrued workers' compensation costs 9 8 Recovery credit 2 20 Operating lease liabilities 11 14 Stock based compensation 2 3 Tax benefits relating to uncertain positions 1 1 Tax credits (federal, state and foreign) 7 7 Section 174 Capitalized R&D 21 13 Other 2 3 Total 79 93 Valuation allowance (8) (8) Total deferred tax assets 71 85 Deferred tax liabilities: Depreciation and amortization (48) (54) Prepaid commission expenses (26) (24) Operating lease right-of-use assets (5) (10) Total deferred tax liabilities (79) (88) Net deferred tax liabilities $ (8) $ (3) |
Schedule of Reconciliation of Beginning and Ending Valuation Allowance | A reconciliation of the beginning and ending amount of the valuation allowance is presented in the table below: Year Ended December 31, (in millions) 2023 2022 2021 Valuation allowance at January 1 $ 8 $ 5 $ 5 Charged to net income — 3 — Valuation allowance at December 31 8 8 5 |
Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) related to uncertain income tax provisions, which would affect the effective tax rate if recognized, is presented in the table below: Year Ended December 31, (in millions) 2023 2022 2021 Unrecognized tax benefits at January 1 $ 7 $ 7 $ 8 Additions for tax positions of current period 2 2 1 Reductions for tax positions of prior period: Lapse of applicable statute of limitations (2) (2) (1) Adjustments to tax positions — — (1) Unrecognized tax benefits at December 31 $ 7 $ 7 $ 7 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted EPS | The following table presents the computation of our basic and diluted EPS attributable to our common stock: Year Ended December 31, (in millions, except per share data) 2023 2022 2021 Net income $ 375 $ 355 $ 338 Weighted average shares of common stock outstanding 57 63 66 Basic EPS $ 6.61 $ 5.66 $ 5.13 Net income $ 375 $ 355 $ 338 Weighted average shares of common stock outstanding 57 63 66 Dilutive effect of stock options and restricted stock units — 1 1 Weighted average shares of common stock outstanding 57 64 67 Diluted EPS $ 6.56 $ 5.61 $ 5.07 Common stock equivalents excluded from income per diluted share because of their anti-dilutive effect 1 2 1 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Preliminary Allocation Of Purchase Price | The purchase price was as follows: (in millions) Amount Cash and stock consideration per agreement $ 220 Closing adjustments 3 Total consideration payable 223 Less: Unvested Zenefits restricted stock (14) Total purchase price $ 209 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the net assets acquired and allocation of the purchase price: (in millions) Amount Total purchase price $ 209 Asset Acquired: Cash $ 4 Restricted cash 5 Accounts receivable, net 4 Intangible assets 96 Operating lease right-of-use asset 9 Deferred tax asset 2 Other assets 5 Total assets acquired 125 Liabilities Assumed Accounts payable and other current liabilities $ 9 Deferred revenue 13 Operating lease liabilities 15 Deferred taxes 18 Total liabilities assumed 55 Net assets acquired $ 70 Goodwill at acquisition $ 139 Measurement period adjustments (3) Goodwill at December 31, 2022 $ 136 The following table summarizes the fair value of the net assets acquired and preliminary allocation of the purchase price: (in millions) Amount Total purchase price $ 48 Asset Acquired: Cash $ 3 Accounts receivable, net 3 Intangible assets 14 Total assets acquired 20 Liabilities Assumed Accounts payable and other current liabilities $ 1 Deferred taxes 3 Total liabilities assumed 4 Net assets acquired $ 16 Goodwill at acquisition $ 32 Goodwill at December 31, 2022 $ 32 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The intangible assets acquired were as follows: (in millions) Amount Estimated Useful Life Acquired technology $ 56 6 years Customer relationships 40 7 years Total intangible assets $ 96 The intangible assets acquired were as follows: (in millions) Amount Estimated Useful Life Acquired technology $ 9 6 years Customer relationships 5 3 - 5 years Total intangible assets $ 14 |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) reporting_unit segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Summary Of Significant Accounting Policy [Line Items] | |||
Number of reportable segments | segment | 1 | ||
Advance collection | $ 8,000,000 | $ 9,000,000 | |
Maximum reimbursement per claim occurrence | $ 1,000,000 | ||
Plan years to be settled | 10 years | ||
Prepayments and miscellaneous receivables offsetting accrued health insurance costs | $ 58,000,000 | $ 57,000,000 | |
Weighted-average rate used in discounting the lease liabilities | 4.20% | 3.90% | |
Number of reporting units | reporting_unit | 1 | ||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Advertising costs | 37,000,000 | 29,000,000 | 21,000,000 |
Bad debt expense, net of recoveries | $ 3,000,000 | 2,000,000 | $ 0 |
Minimum | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated useful life of intangible assets | 1 year | ||
Minimum | Software Development | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated useful life of intangible assets | 3 years | ||
Minimum | Furniture, fixtures, and equipment | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated useful life of property and equipment | 5 years | ||
Minimum | Office equipment, including data processing equipment | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated useful life of property and equipment | 5 years | ||
Maximum | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated useful life of intangible assets | 10 years | ||
Maximum | Software Development | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated useful life of intangible assets | 6 years | ||
Maximum | Furniture, fixtures, and equipment | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated useful life of property and equipment | 7 years | ||
Maximum | Office equipment, including data processing equipment | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated useful life of property and equipment | 7 years | ||
Health Care | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Prepayments and miscellaneous receivables offsetting accrued health insurance costs | $ 68,000,000 | $ 73,000,000 | |
Non-US | Geographic Concentration Risk | Revenue | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Concentration risk percentage | 1% |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Change in Balance of the Recovery Credit Unsatisfied Performance Obligation (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Unsatisfied Performance Obligation [Roll Forward] | ||
Balance at beginning of period | $ 75 | $ 48 |
(+) Accruals | 0 | 75 |
(-) Distributions to clients | (68) | (48) |
Balance at end of period | $ 7 | $ 75 |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Capitalized Contract Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Capitalized | $ 33 | $ 32 | $ 28 |
Amortized | $ 35 | $ 31 | $ 25 |
CASH, CASH EQUIVALENTS AND IN_3
CASH, CASH EQUIVALENTS AND INVESTMENTS - UNRESTRICTED AND RESTRICTED (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Cash and cash equivalents | $ 287 | $ 354 |
Investments | 65 | 76 |
Restricted cash, cash equivalents and investments | 1,269 | 1,263 |
Investments, noncurrent | 143 | 151 |
Restricted cash, cash equivalents and investments, noncurrent | 158 | 153 |
Total | 1,922 | 1,997 |
Payroll funds collected | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 1,067 | 1,062 |
Collateral for health benefits claims | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 144 | 139 |
Collateral for workers' compensation claims | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 56 | 58 |
Restricted cash, cash equivalents and investments, noncurrent | 158 | 150 |
Other security deposits | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 2 | 4 |
Restricted cash, cash equivalents and investments, noncurrent | 0 | 3 |
Cash and cash equivalents | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Cash and cash equivalents | 287 | 354 |
Investments | 0 | 0 |
Restricted cash, cash equivalents and investments | 1,154 | 1,153 |
Investments, noncurrent | 0 | 0 |
Total | 1,466 | 1,537 |
Cash and cash equivalents | Payroll funds collected | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 1,067 | 1,062 |
Cash and cash equivalents | Collateral for health benefits claims | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 31 | 29 |
Cash and cash equivalents | Collateral for workers' compensation claims | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 54 | 58 |
Restricted cash, cash equivalents and investments, noncurrent | 25 | 27 |
Cash and cash equivalents | Other security deposits | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 2 | 4 |
Restricted cash, cash equivalents and investments, noncurrent | 0 | 3 |
Available-for-sale marketable securities | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Investments | 65 | 76 |
Restricted cash, cash equivalents and investments | 115 | 110 |
Investments, noncurrent | 143 | 151 |
Total | 456 | 460 |
Available-for-sale marketable securities | Payroll funds collected | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 0 | 0 |
Available-for-sale marketable securities | Collateral for health benefits claims | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 113 | 110 |
Available-for-sale marketable securities | Collateral for workers' compensation claims | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 2 | 0 |
Restricted cash, cash equivalents and investments, noncurrent | 133 | 123 |
Available-for-sale marketable securities | Other security deposits | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, cash equivalents and investments | 0 | 0 |
Restricted cash, cash equivalents and investments, noncurrent | $ 0 | $ 0 |
INVESTMENTS - Schedule of Finan
INVESTMENTS - Schedule of Financial Instruments by Significant Categories and Fair Value Measurement on a Recurring Basis (Details) - Fair Value Measurements on a Recurring Basis - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | $ 190 | $ 332 |
Amortized Cost | 457 | 464 |
Gross Unrealized Gains | 2 | 0 |
Gross Unrealized Losses | (3) | (4) |
Fair Value | 456 | 460 |
Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 101 | 243 |
Fair Value | 0 | 0 |
Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 0 | 0 |
Fair Value | 208 | 226 |
Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 89 | 89 |
Fair Value | 248 | 234 |
Asset-backed securities | Level 2 | ||
Fair Value, Financial Instruments [Line Items] | ||
Amortized Cost | 41 | 42 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (2) |
Fair Value | 40 | 40 |
Asset-backed securities | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 0 |
Asset-backed securities | Level 2 | Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 40 | 40 |
Asset-backed securities | Level 2 | Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 0 |
Corporate bonds | Level 2 | ||
Fair Value, Financial Instruments [Line Items] | ||
Amortized Cost | 135 | 140 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 136 | 139 |
Corporate bonds | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 0 |
Corporate bonds | Level 2 | Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 103 | 112 |
Corporate bonds | Level 2 | Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 33 | 27 |
Agency securities | Level 2 | ||
Fair Value, Financial Instruments [Line Items] | ||
Amortized Cost | 40 | 33 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (1) |
Fair Value | 39 | 32 |
Agency securities | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 0 |
Agency securities | Level 2 | Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 10 | 5 |
Agency securities | Level 2 | Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 29 | 27 |
U.S. treasuries | Level 2 | ||
Fair Value, Financial Instruments [Line Items] | ||
Amortized Cost | 231 | 229 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (1) | 0 |
Fair Value | 231 | 229 |
U.S. treasuries | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 0 |
U.S. treasuries | Level 2 | Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 47 | 62 |
U.S. treasuries | Level 2 | Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 184 | 167 |
Certificate of deposit | Level 2 | ||
Fair Value, Financial Instruments [Line Items] | ||
Amortized Cost | 2 | 12 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 2 | 12 |
Certificate of deposit | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 0 |
Certificate of deposit | Level 2 | Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 0 |
Certificate of deposit | Level 2 | Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 2 | 12 |
Other debt securities | Level 2 | ||
Fair Value, Financial Instruments [Line Items] | ||
Amortized Cost | 8 | 8 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 8 | 8 |
Other debt securities | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 0 |
Other debt securities | Level 2 | Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 8 | 7 |
Other debt securities | Level 2 | Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Fair Value | 0 | 1 |
Money market mutual funds | Level 1 | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 183 | 314 |
Money market mutual funds | Level 1 | Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 96 | 225 |
Money market mutual funds | Level 1 | Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 0 | 0 |
Money market mutual funds | Level 1 | Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 87 | 89 |
U.S. treasuries | Level 2 | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 7 | 18 |
U.S. treasuries | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 5 | 18 |
U.S. treasuries | Level 2 | Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | 0 | 0 |
U.S. treasuries | Level 2 | Restricted Cash, Cash Equivalents and Investments | ||
Fair Value, Financial Instruments [Line Items] | ||
Total cash equivalents | $ 2 | $ 0 |
INVESTMENTS - Schedule of Fair
INVESTMENTS - Schedule of Fair Value of Debt Investments by Contractual Maturity (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
One year or less | $ 93 |
Over one year through five years | 332 |
Over five years through ten years | 11 |
Over ten years | 20 |
Total fair value | $ 456 |
INVESTMENTS - Schedule of Gross
INVESTMENTS - Schedule of Gross Proceeds from AFS debt securities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross realized losses | $ (1) | $ (18) | $ 0 |
Gross proceeds from sales | 150 | 227 | 162 |
Gross proceeds from maturities | 137 | 253 | 187 |
Total | $ 286 | $ 462 | $ 349 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Debt Securities, Available-for-sale [Line Items] | |||
AFS securities, gross realized gain (loss) | $ 0 | ||
AFS securities, gross unrealized losses | $ 7,000,000 | ||
Gross unrealized losses related to AFS investments in an unrealized loss position for greater than 12 months | 4,000,000 | $ 0 | $ 0 |
2029 Notes Payable | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fair value of notes payable | $ 413,000,000 | 443,000,000 | |
2031 Notes Payable | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fair value of notes payable | $ 414,000,000 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 72 | $ 77 |
Less: Accumulated depreciation | (55) | (50) |
Less: Impairments | 0 | (3) |
Property and equipment, net | 17 | 24 |
Office equipment, including data processing equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 37 | 36 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 19 | 21 |
Furniture, fixtures, and equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 14 | 16 |
Projects in progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 2 | $ 4 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 9 | $ 10 | $ 9 |
GOODWILL, SOFTWARE AND OTHER _3
GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Schedule of Changes in Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 462 | $ 294 |
Additions | 0 | 168 |
Goodwill, Ending Balance | $ 462 | $ 462 |
GOODWILL, SOFTWARE AND OTHER _4
GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Schedule of Software and Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Amortizable intangibles: | ||
Gross Carrying Amount | $ 464 | $ 478 |
Accumulated Amortization | (292) | (315) |
Net Carrying Amount | $ 172 | 163 |
Software | ||
Amortizable intangibles: | ||
Weighted Average Amortization Period | 3 years | |
Gross Carrying Amount | $ 350 | 278 |
Accumulated Amortization | (255) | (213) |
Net Carrying Amount | $ 95 | 65 |
Customer relationships | ||
Amortizable intangibles: | ||
Weighted Average Amortization Period | 6 years | |
Gross Carrying Amount | $ 49 | 135 |
Accumulated Amortization | (18) | (93) |
Net Carrying Amount | $ 31 | 42 |
Developed technology | ||
Amortizable intangibles: | ||
Weighted Average Amortization Period | 6 years | |
Gross Carrying Amount | $ 65 | 65 |
Accumulated Amortization | (19) | (9) |
Net Carrying Amount | $ 46 | $ 56 |
GOODWILL, SOFTWARE AND OTHER _5
GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 63,000,000 | $ 54,000,000 | $ 50,000,000 |
Impairment of finite-lived intangible assets | $ 0 | $ 0 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of finite-lived intangible assets | $ 7,000,000 |
GOODWILL, SOFTWARE AND OTHER _6
GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Schedule of Capitalized Internally Developed Software Costs and Related Depreciation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Capitalized internally developed software costs | $ 69 | $ 48 | $ 33 |
Depreciation expense for capitalized internally developed software costs | $ 42 | $ 35 | $ 33 |
GOODWILL, SOFTWARE AND OTHER _7
GOODWILL, SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Schedule of Expected Expense Related to Intangibles Amortization in Future Periods (Details) (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 59 |
2025 | 46 |
2026 | 31 |
2027 | 23 |
2028 | 7 |
2029 and thereafter | 3 |
Net Carrying Amount | $ 169 |
ACCRUED WORKERS' COMPENSATION_3
ACCRUED WORKERS' COMPENSATION COSTS - Schedule of Activities in Liability for Unpaid Claims and Claims Adjustment Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Total accrued costs, beginning of year | $ 189 | $ 198 | $ 205 |
Incurred | |||
Current year | 66 | 68 | 66 |
Prior years | (36) | (32) | (23) |
Total incurred | 30 | 36 | 43 |
Paid | |||
Current year | (10) | (10) | (10) |
Prior years | (34) | (35) | (40) |
Total paid | (44) | (45) | (50) |
Total accrued costs, end of year | $ 175 | $ 189 | $ 198 |
ACCRUED WORKERS' COMPENSATION_4
ACCRUED WORKERS' COMPENSATION COSTS - Schedule of Workers' Compensation Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Insurance [Abstract] | ||||
Total accrued costs, end of year | $ 175 | $ 189 | $ 198 | $ 205 |
Collateral paid to carriers and offset against accrued costs | (5) | (7) | ||
Total accrued costs, net of carrier collateral offset | 170 | 182 | ||
Payable in less than 1 year (net of collateral paid to carriers) | 50 | 54 | ||
Payable in more than 1 year (net of collateral paid to carriers) | 120 | 128 | ||
Collateral paid, current | 1 | 2 | ||
Collateral paid, noncurrent | $ 4 | $ 5 |
ACCRUED WORKERS' COMPENSATION_5
ACCRUED WORKERS' COMPENSATION COSTS - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Insurance [Abstract] | ||
Collateral held by insurance carriers | $ 32 | $ 43 |
Collateral paid to carriers and offset against loss reserves | $ 5 | $ 7 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Leased Assets [Line Items] | |||
Operating lease expense | $ 11 | $ 15 | $ 13 |
Impairment of operating lease expense | $ 6 | $ 20 | |
Lease term (in years) | 3 years 9 months 18 days | 4 years 4 months 24 days | |
Minimum | |||
Operating Leased Assets [Line Items] | |||
Term of contract (in years) | 1 year | ||
Maximum | |||
Operating Leased Assets [Line Items] | |||
Term of contract (in years) | 6 years |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Payments (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2024 | $ 15 | |
2025 | 13 | |
2026 | 8 | |
2027 | 7 | |
2028 | 5 | |
2029 and thereafter | 0 | |
Total future minimum lease payments | 48 | |
Less: imputed interest | (4) | |
Total operating lease liabilities | 44 | |
Current portion | 14 | $ 15 |
Non-current portion | $ 30 | $ 41 |
LONG-TERM DEBT AND REVOLVING _3
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENTS - Schedule of Senior Notes Payable (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Aug. 31, 2023 | Dec. 31, 2022 | Feb. 28, 2021 |
Line of Credit | 2021 Revolver | ||||
Line of Credit Facility [Line Items] | ||||
Annual contractual interest rate | 6.58% | |||
Effective interest rate | 7.07% | |||
Principal amount | $ 200 | |||
Deferred issuance costs | 0 | |||
Less: current portion | (109) | |||
Long-term debt, noncurrent | $ 91 | $ 0 | ||
Senior Notes | 2029 Notes Payable | ||||
Line of Credit Facility [Line Items] | ||||
Annual contractual interest rate | 3.50% | 3.50% | ||
Effective interest rate | 3.67% | |||
Principal amount | $ 500 | $ 500 | ||
Deferred issuance costs | (3) | |||
Less: current portion | 0 | |||
Long-term debt, noncurrent | $ 497 | 496 | ||
Senior Notes | 2031 Notes Payable | ||||
Line of Credit Facility [Line Items] | ||||
Annual contractual interest rate | 7.13% | 7.125% | ||
Effective interest rate | 7.30% | |||
Principal amount | $ 400 | $ 400 | ||
Deferred issuance costs | (4) | |||
Less: current portion | 0 | |||
Long-term debt, noncurrent | $ 396 | $ 0 |
LONG-TERM DEBT AND REVOLVING _4
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT BORROWINGS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 | Aug. 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2023 | Jul. 31, 2023 | Feb. 28, 2021 | |
2021 Revolver | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
New term loan | $ 200 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.58% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from revolving credit agreement borrowings | $ 200 | $ 495 | |||||
Repayments of debt | $ 295 | $ 200 | |||||
Revolving credit facility amount | $ 700 | $ 500 | $ 500 | ||||
Revolving credit facility remaining capacity | $ 494 | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Base Rate | Credit Rating Below Investment Grade | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 0.125% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Secured Overnight Financing Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 0% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Secured Overnight Financing Rate | Credit Rating Below Investment Grade | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 1.125% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Adjusted Term SOFR Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 0.10% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 0.50% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | One Month Term SOFR (Secured Overnight Financing Rate) | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 1% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.582% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Minimum | London Interbank Offered Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 1.25% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Minimum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 0.25% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Minimum | Secured Overnight Financing Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 1.25% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.125% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Maximum | London Interbank Offered Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 2% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Maximum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 1% | ||||||
2021 Revolver | Line of Credit | Revolving Credit Facility | Maximum | Secured Overnight Financing Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 2% | ||||||
2029 Notes Payable | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
New term loan | $ 500 | $ 500 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | 3.50% | |||||
2031 Notes Payable | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
New term loan | $ 400 | $ 400 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.125% | 7.13% | |||||
2031 Notes Payable | Senior Notes | Before August 15, 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 100% | ||||||
2031 Notes Payable | Senior Notes | Partial Redemption | Before August 15, 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of principal amount redeemed | 40% | ||||||
Redemption price percentage | 107.125% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 29, 2020 retirement_plan |
Commitments and Contingencies Disclosure [Abstract] | |
Number of retirement plans subject to class action | 2 |
STOCK BASED COMPENSATION - Narr
STOCK BASED COMPENSATION - Narrative (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2023 shares | |
Additional Disclosures for equity-based plans | |
Shares available for grant (in shares) | 5 |
Employee Stock Purchase Plan | |
Additional Disclosures for equity-based plans | |
Stock options granted percentage of fair market value on offering date | 85% |
Stock options granted percentage of fair market value on purchase date | 85% |
Offering period | 6 months |
Stock Options | |
Additional Disclosures for equity-based plans | |
Vesting period | 4 years |
Stock Options | Common Class A | Maximum | |
Additional Disclosures for equity-based plans | |
Contractual term | 10 years |
Employee Stock | |
Additional Disclosures for equity-based plans | |
Shares available for grant (in shares) | 5 |
Time-Based Restricted Stock Units | |
Additional Disclosures for equity-based plans | |
Vesting period | 4 years |
Time-Based Restricted Stock Units | Minimum | |
Additional Disclosures for equity-based plans | |
Percent of share value | 0% |
Time-Based Restricted Stock Units | Maximum | |
Additional Disclosures for equity-based plans | |
Percent of share value | 200% |
Performance-Based Restricted Stock Units | Share-based Payment Arrangement, Tranche One | |
Additional Disclosures for equity-based plans | |
Vesting period | 1 year |
Amount of shares that are expected to vest (as a percent ) | 50% |
STOCK BASED COMPENSATION - Sche
STOCK BASED COMPENSATION - Schedule of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Beginning balance (in shares) | 190,275 | |
Exercised (in shares) | (182,067) | |
Ending balance (in shares) | 8,208 | 190,275 |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 20.50 | |
Exercised (in dollars per share) | 20.50 | |
Ending balance (in dollars per share) | $ 19.50 | $ 20.50 |
Weighted Average Remaining Contractual Term (in years) | 5 months 12 days | 1 year 6 months |
Aggregate Intrinsic Value, beginning balance | $ 9 | |
Aggregate Intrinsic Value, Exercised | 14 | |
Aggregate Intrinsic Value, ending balance | $ 1 | $ 9 |
STOCK BASED COMPENSATION - Sc_2
STOCK BASED COMPENSATION - Schedule of Additional Disclosure for Stock Options (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Additional Disclosures for equity-based plans | |||
Total intrinsic value of options exercised | $ 14 | ||
Stock Options | |||
Additional Disclosures for equity-based plans | |||
Total intrinsic value of options exercised | 14 | $ 8 | $ 6 |
Cash received from options exercised | $ 4 | $ 1 | $ 1 |
STOCK BASED COMPENSATION - Sc_3
STOCK BASED COMPENSATION - Schedule of RSU and RSA Activity (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Time-Based Restricted Stock Units | |
Total Number of Shares | |
Balance (in shares) | shares | 1,198,561 |
Granted (in shares) | shares | 769,286 |
Vested (in shares) | shares | (617,937) |
Forfeited (in shares) | shares | (120,708) |
Balance (in shares) | shares | 1,229,202 |
Weighted-Average Grant Date Fair Value | |
Balance (in dollars per share) | $ / shares | $ 80.75 |
Granted (in dollars per share) | $ / shares | 78.27 |
Vested (in dollars per share) | $ / shares | 76.25 |
Forfeited (in dollars per share) | $ / shares | 82.58 |
Balance (in dollars per share) | $ / shares | $ 80.88 |
Performance-Based Restricted Stock Units | |
Total Number of Shares | |
Balance (in shares) | shares | 202,586 |
Granted (in shares) | shares | 177,067 |
Vested (in shares) | shares | (156,642) |
Balance (in shares) | shares | 223,011 |
Weighted-Average Grant Date Fair Value | |
Balance (in dollars per share) | $ / shares | $ 86.82 |
Granted (in dollars per share) | $ / shares | 79.05 |
Vested (in dollars per share) | $ / shares | 86.22 |
Balance (in dollars per share) | $ / shares | $ 81.08 |
STOCK BASED COMPENSATION - Sc_4
STOCK BASED COMPENSATION - Schedule of Additional Disclosures for Equity Based Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Additional Disclosures for equity-based plans | |||
Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees (in shares) | 288,492 | 324,092 | 285,390 |
Time-Based Restricted Stock Units | |||
Additional Disclosures for equity-based plans | |||
Total grant date fair value of shares granted (in millions) | $ 60 | $ 85 | $ 47 |
Total grant date fair value of shares vested (in millions) | $ 47 | $ 42 | $ 34 |
Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees (in shares) | 213,569 | 204,191 | 207,603 |
Performance-Based Restricted Stock Units | |||
Additional Disclosures for equity-based plans | |||
Total grant date fair value of shares granted (in millions) | $ 14 | $ 20 | $ 16 |
Total grant date fair value of shares vested (in millions) | $ 14 | $ 17 | $ 8 |
Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees (in shares) | 74,923 | 119,901 | 77,787 |
STOCK BASED COMPENSATION - Sc_5
STOCK BASED COMPENSATION - Schedule of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Additional Disclosures for equity-based plans | |||
Expected Term (in Years) | 6 months | 6 months | 6 months |
Expected Volatility, Minimum | 29% | 21% | 21% |
Expected Volatility, Maximum | 35% | 39% | 35% |
Risk-Free Interest Rate, Minimum | 5.30% | 0.70% | 0.40% |
Risk-Free Interest Rate, Maximum | 5.40% | 4.50% | 0.70% |
Expected Dividend Yield | 0% | 0% | 0% |
Shares Issued under ESPP | 175,446 | 158,134 | 136,861 |
STOCK BASED COMPENSATION - Sc_6
STOCK BASED COMPENSATION - Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Additional Disclosures for equity-based plans | |||
Total stock based compensation expense | $ 59 | $ 62 | $ 50 |
Total stock based compensation capitalized | 3 | 1 | 1 |
Income tax benefit related to stock based compensation expense | 13 | 13 | 10 |
Tax benefit realized | 19 | 14 | 16 |
Cost of providing services | |||
Additional Disclosures for equity-based plans | |||
Total stock based compensation expense | 14 | 13 | 12 |
Sales and marketing | |||
Additional Disclosures for equity-based plans | |||
Total stock based compensation expense | 8 | 7 | 6 |
General and administrative | |||
Additional Disclosures for equity-based plans | |||
Total stock based compensation expense | 33 | 38 | 29 |
Systems development and programming costs | |||
Additional Disclosures for equity-based plans | |||
Total stock based compensation expense | $ 4 | $ 4 | $ 3 |
STOCK BASED COMPENSATION - Sc_7
STOCK BASED COMPENSATION - Schedule of Unrecognized Compensation Expense (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Time based RSUs | |
Additional Disclosures for equity-based plans | |
Unrecognized compensation expense of awards other than options, net of forfeitures | $ 92 |
Unrecognized compensation expense, expected to be recognized over a weighted-average period (in years) | 2 years 5 months 19 days |
Performance based RSUs | |
Additional Disclosures for equity-based plans | |
Unrecognized compensation expense of awards other than options, net of forfeitures | $ 10 |
Unrecognized compensation expense, expected to be recognized over a weighted-average period (in years) | 1 year 7 months 28 days |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Common Stock (Details) - shares | 1 Months Ended | 12 Months Ended | |||||
Dec. 06, 2022 | Mar. 17, 2022 | Sep. 30, 2023 | Aug. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued, beginning balance (in shares) | 60,555,661 | 65,968,224 | 66,456,663 | ||||
Shares outstanding, beginning balance (in shares) | 60,555,661 | 65,968,224 | 66,456,663 | ||||
Issuance of common stock from exercise of stock options (in shares) | 182,067 | ||||||
Issuance of common stock for employee stock purchase plan (in shares) | 175,446 | 158,134 | 136,861 | ||||
Issuance of common stock for the acquisition of Zenefits (in shares) | 0 | 193,221 | 0 | ||||
Repurchase of common stock (in shares) | (1,515,258) | (3,653,690) | (3,364,486) | (5,981,308) | (10,734,790) | (6,398,279) | (1,161,909) |
Awards effectively repurchased for required employee withholding taxes (in shares) | (288,492) | (324,092) | (285,390) | ||||
Shares outstanding, ending balance (in shares) | 50,664,471 | 60,555,661 | 65,968,224 | ||||
Shares issued, ending balance (in shares) | 50,664,471 | 60,555,661 | 65,968,224 | ||||
Restricted Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock from vested restricted stock units (in shares) | 774,579 | 841,861 | 748,881 | ||||
Equity Option | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock from exercise of stock options (in shares) | 182,067 | 116,592 | 73,118 | ||||
Employee Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for employee stock purchase plan (in shares) | 175,446 | 158,134 | 136,861 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||||||||||
Dec. 06, 2022 | Mar. 17, 2022 | Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Feb. 28, 2023 | Nov. 30, 2022 | Feb. 28, 2022 | Feb. 29, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 29, 2024 | |
Class of Stock [Line Items] | |||||||||||||
Stock repurchase program, authorized amount | $ 1,000 | $ 300 | $ 200 | $ 300 | $ 300 | ||||||||
Repurchase of common stock (in shares) | 1,515,258 | 3,653,690 | 3,364,486 | 5,981,308 | 10,734,790 | 6,398,279 | 1,161,909 | ||||||
Stock repurchased, cost per share (in dollars per share) | $ 72 | $ 86.50 | $ 107 | $ 107 | |||||||||
Repurchase of common stock | $ 111 | $ 319 | $ 360 | $ 640 | |||||||||
Remaining authorized amount available for repurchase | $ 433 | ||||||||||||
Subsequent event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Dividends authorized (in dollars per share) | $ 0.25 | ||||||||||||
Dividends authorized | $ 13 | ||||||||||||
Atairos Group | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Ownership interest | 36% |
STOCKHOLDERS' EQUITY - Schedu_2
STOCKHOLDERS' EQUITY - Schedule of Stock Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Dec. 06, 2022 | Mar. 17, 2022 | Sep. 30, 2023 | Aug. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||||
Total cost | $ 1,122 | $ 523 | $ 94 | ||||
Total shares (in shares) | 1,515,258 | 3,653,690 | 3,364,486 | 5,981,308 | 10,734,790 | 6,398,279 | 1,161,909 |
Stock Repurchase Plan | |||||||
Class of Stock [Line Items] | |||||||
Total cost | $ 1,112 | $ 519 | $ 94 | ||||
Total shares (in shares) | 10,734,790 | 6,398,279 | 1,161,909 | ||||
Average price per share (in dollars per share) | $ 103.59 | $ 81.07 | $ 81.13 |
INCOME TAXES - Schedule of Prov
INCOME TAXES - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 96 | $ 112 | $ 86 |
State | 24 | 36 | 28 |
Foreign | 2 | 0 | 1 |
Total Current | 122 | 148 | 115 |
Deferred: | |||
Federal | 1 | (17) | (7) |
State | 3 | (6) | (3) |
Foreign | 0 | 2 | (2) |
Total Deferred | 4 | (21) | (12) |
Total | $ 126 | $ 127 | $ 103 |
INCOME TAXES - Schedule of U.S.
INCOME TAXES - Schedule of U.S. Federal Statutory Income Tax Rate Reconciled to Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Pre-Tax Income | $ 501 | $ 482 | $ 441 |
Tax Expense/(Benefit) | |||
U.S. federal statutory tax rate | 105 | 101 | 93 |
State income taxes, net of federal benefit | 34 | 34 | 32 |
Tax rate change | 1 | 0 | (1) |
Nondeductible meals, entertainment and penalties | 2 | 3 | 2 |
Stock based compensation | (2) | 3 | (2) |
Uncertain tax positions | 0 | 0 | (1) |
Tax credits | (6) | (8) | (7) |
State and tax return to provision adjustments | (11) | (9) | (10) |
Other | 3 | 3 | (3) |
Total | $ 126 | $ 127 | $ 103 |
Percent of Pre-Tax Income (Loss) | |||
U.S. federal statutory tax rate | 21% | 21% | 21% |
State income taxes, net of federal benefit | 7% | 7% | 7% |
Tax rate change | 0% | 0% | 0% |
Nondeductible meals, entertainment and penalties | 0% | 1% | 0% |
Stock based compensation | 0% | 1% | 0% |
Uncertain tax positions | 0% | 0% | 0% |
Tax credits | (1.00%) | (2.00%) | (2.00%) |
State and tax return to provision adjustments | (2.00%) | (2.00%) | (2.00%) |
Other | 0% | 0% | (1.00%) |
Total | 25% | 26% | 23% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes Disclosure [Line Items] | |||
Increased in effective income tax rate | (1.00%) | ||
Effective income tax rate | 25% | 26% | 23% |
Capital Loss Carryforward | |||
Income Taxes Disclosure [Line Items] | |||
State tax credit carryforwards | $ 3 | ||
Federal | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforwards | 1 | $ 2 | |
State and Local Jurisdiction | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforwards | 91 | 94 | |
State tax credit carryforwards | 5 | $ 5 | |
Canada | |||
Income Taxes Disclosure [Line Items] | |||
State tax credit carryforwards | $ 2 |
INCOME TAXES - Schedule of Sign
INCOME TAXES - Schedule of Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||||
Net operating losses (federal and state) | $ 6 | $ 7 | ||
Accrued expenses | 18 | 17 | ||
Accrued workers' compensation costs | 9 | 8 | ||
Recovery credit | 2 | 20 | ||
Operating lease liabilities | 11 | 14 | ||
Stock based compensation | 2 | 3 | ||
Tax benefits relating to uncertain positions | 1 | 1 | ||
Tax credits (federal, state and foreign) | 7 | 7 | ||
Section 174 Capitalized R&D | 21 | 13 | ||
Other | 2 | 3 | ||
Total | 79 | 93 | ||
Valuation allowance | (8) | (8) | $ (5) | $ (5) |
Total deferred tax assets | 71 | 85 | ||
Deferred tax liabilities: | ||||
Depreciation and amortization | (48) | (54) | ||
Prepaid commission expenses | (26) | (24) | ||
Operating lease right-of-use assets | (5) | (10) | ||
Total deferred tax liabilities | (79) | (88) | ||
Net deferred tax liabilities | $ (8) | $ (3) |
INCOME TAXES - Schedule of Reco
INCOME TAXES - Schedule of Reconciliation of Beginning and Ending Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Valuation Allowance [Roll Forward] | |||
Valuation allowance at January 1 | $ 8 | $ 5 | $ 5 |
Charged to net income | 0 | 3 | 0 |
Valuation allowance at December 31 | $ 8 | $ 8 | $ 5 |
INCOME TAXES - Schedule of Re_2
INCOME TAXES - Schedule of Reconciliation of Beginning and Ending Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at January 1 | $ 7 | $ 7 | $ 8 |
Additions for tax positions of current period | 2 | 2 | 1 |
Lapse of applicable statute of limitations | (2) | (2) | (1) |
Adjustments to tax positions | 0 | 0 | (1) |
Unrecognized tax benefits at December 31 | $ 7 | $ 7 | $ 7 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Net income | $ 375 | $ 355 | $ 338 |
Weighted average shares of common stock outstanding, basic (in shares) | 57 | 63 | 66 |
Basic EPS (in dollars per share) | $ 6.61 | $ 5.66 | $ 5.13 |
Net income | $ 375 | $ 355 | $ 338 |
Dilutive effect of stock options and restricted stock units (in shares) | 0 | 1 | 1 |
Weighted average shares of common stock outstanding (in shares) | 57 | 64 | 67 |
Diluted EPS (in dollars per share) | $ 6.56 | $ 5.61 | $ 5.07 |
Common stock equivalents excluded from income per diluted share because of their anti-dilutive effect (in shares) | 1 | 2 | 1 |
401(k) PLAN (Details)
401(k) PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Postemployment Benefits [Abstract] | |||
Company match, employee contributions | $ 17 | $ 14 | $ 15 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Related Party - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Revenues | $ 12 | $ 16 | $ 14 |
Software Service Provider | |||
Related Party Transaction [Line Items] | |||
Payments for software services provided | $ 3 | $ 2 | $ 2 |
ACQUISITIONS - Purchase Price A
ACQUISITIONS - Purchase Price Allocation (Details) - Zenefits $ in Millions | Feb. 15, 2022 USD ($) |
Business Acquisition [Line Items] | |
Cash and stock consideration per agreement | $ 220 |
Closing adjustments | 3 |
Total consideration payable | 223 |
Total purchase price | 209 |
Restricted Stock | |
Business Acquisition [Line Items] | |
Less: Unvested Zenefits restricted stock | $ (14) |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ in Millions | Sep. 01, 2022 | Feb. 15, 2022 |
Zenefits | ||
Business Acquisition [Line Items] | ||
Cash consideration paid | $ 192 | |
Common stock transferred (in shares) | 193,221 | |
Fair value of equity issued in business combination | $ 17 | |
Zenefits | Restricted Stock | ||
Business Acquisition [Line Items] | ||
Award requisite service period | 18 months | |
Clarus | ||
Business Acquisition [Line Items] | ||
Cash consideration paid | $ 48 |
ACQUISITIONS - Summary of the F
ACQUISITIONS - Summary of the Fair Value of the Net Assets Acquired (Details) - USD ($) $ in Millions | Sep. 01, 2022 | Feb. 15, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Liabilities Assumed | |||||
Goodwill | $ 462 | $ 462 | $ 294 | ||
Zenefits | |||||
Business Acquisition [Line Items] | |||||
Total purchase price | $ 209 | ||||
Asset Acquired: | |||||
Cash | 4 | ||||
Restricted cash | 5 | ||||
Accounts receivable, net | 4 | ||||
Intangible assets | 96 | ||||
Operating lease right-of-use asset | 9 | ||||
Deferred tax asset | 2 | ||||
Other assets | 5 | ||||
Total assets acquired | 125 | ||||
Liabilities Assumed | |||||
Accounts payable and other current liabilities | 9 | ||||
Deferred revenue | 13 | ||||
Operating lease liabilities | 15 | ||||
Deferred taxes | 18 | ||||
Total liabilities assumed | 55 | ||||
Net assets acquired | 70 | ||||
Goodwill | 139 | 136 | |||
Measurement period adjustments | $ (3) | ||||
Clarus | |||||
Business Acquisition [Line Items] | |||||
Total purchase price | $ 48 | ||||
Asset Acquired: | |||||
Cash | 3 | ||||
Accounts receivable, net | 3 | ||||
Intangible assets | 14 | ||||
Total assets acquired | 20 | ||||
Liabilities Assumed | |||||
Accounts payable and other current liabilities | 1 | ||||
Deferred taxes | 3 | ||||
Total liabilities assumed | 4 | ||||
Net assets acquired | 16 | ||||
Goodwill | $ 32 | $ 32 |
ACQUISITIONS - Intangible Asset
ACQUISITIONS - Intangible Assets Acquired (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 01, 2022 | Feb. 15, 2022 | Dec. 31, 2023 | |
Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 6 years | ||
Zenefits | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 96 | ||
Zenefits | Acquired technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 56 | ||
Estimated Useful Life | 6 years | ||
Zenefits | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 40 | ||
Estimated Useful Life | 7 years | ||
Zenefits | Customer relationships | Minimum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 3 years | ||
Zenefits | Customer relationships | Maximum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 5 years | ||
Clarus | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 14 | ||
Clarus | Acquired technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 9 | ||
Estimated Useful Life | 6 years | ||
Clarus | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 5 |