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INVESTMENTS AND FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
INVESTMENTS AND FAIR VALUE MEASUREMENT INVESTMENTS AND FAIR VALUE MEASUREMENTS
Accounting Standards Codification (ASC) 820 “Fair Value Measurement” (ASC 820) defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable:

Level 1:
Quoted prices in active markets for identical assets or liabilities;
Level 2:
Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and
Level 3:Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and December 31, 2021, respectively (in thousands):
Total Carrying ValueLevel 1Level 2Level 3
December 31, 2022
Assets:    
Funds held for clients
Money market funds$2,829 $2,829 $— $— 
Available-for-sale securities56,556 — 56,556 — 
Total$59,385 $2,829 $56,556 $— 
Liabilities:
Contingent purchase consideration(1)
$2,954 $— $— $2,954 
Total$2,954 $— $— $2,954 
December 31, 2021
Assets:
Cash equivalents
Money market funds$— $— $— $— 
Funds held for clients
Money market funds1,116 1,116 — — 
Available-for-sale securities32,060 — 32,060 — 
Total$33,176 $1,116 $32,060 $— 
Liabilities:
Contingent purchase consideration(1)
$4,329 $— $— $4,329 
Total$4,329 $— $— $4,329 
(1)See Note 2 — Business Combinations for further discussion regarding the contingent purchase consideration.
The contractual obligations and earn out provision are accounted for as a contingent liability and fair value is determined using Level 3 inputs, as estimating the fair value of these contingent liabilities require the use of significant and subjective inputs that may and are likely to change over the duration of the liabilities. The following table discloses the change in the gross contingent purchase consideration on the Company’s Consolidated Balance Sheets as of December 31, 2022 (in thousands):
December 31, 2021$4,329 
Contingent purchase consideration paid(130)
Change in fair value of contingent liability(1,245)
Issued for acquisitions— 
December 31, 2022$2,954 

Restricted cash equivalents and investments classified as available-for-sale within funds held for clients consisted of the following (in thousands):
Amortized
Cost
Gross
Unrealized
Gains (1)
Gross
Unrealized
Losses (1)
Aggregate
Estimated
Fair Value
December 31, 2022
Restricted cash equivalents$2,829 $— $— $2,829 
Available-for-sale securities:
Certificates of deposit983 4 (2)985 
Corporate debt securities52,251 1 (2,023)50,229 
Municipal bonds5,297 — (405)4,892 
U.S. Government agency securities500 — (50)450 
Total available-for-sale securities59,031 5 (2,480)56,556 
Total(2)
$61,860 $5 $(2,480)$59,385 
December 31, 2021
Restricted cash equivalents$1,116 $— $— $1,116 
Available-for-sale securities:
Certificates of deposit1,240 7 (4)1,243 
Corporate debt securities22,597 2 (76)22,523 
Municipal bonds7,825 3 (24)7,804 
U.S. Government agency securities500 — (10)490 
Total available-for-sale securities32,162 12 (114)32,060 
Total(2)
$33,278 $12 $(114)$33,176 

(1)Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive income (loss). As of December 31, 2022 and December 31, 2021, there were 3 and 10 securities, respectively, in an unrealized gain position and there were 124 and 57 securities in an unrealized loss position, respectively. As of December 31, 2022, these unrealized losses were less than $96 individually and $2,480 in the aggregate. As of December 31, 2021, these unrealized losses were less than $11 individually and $114 in the aggregate. These securities have not been in a continuous unrealized gain or loss position for more than 12 months. We do not intend to sell these investments and we do not expect to sell these investments before recovery of their amortized cost basis, which may be at maturity. We review our investments to identify and evaluate investments that indicate possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

(2)At December 31, 2022 and December 31, 2021, none of these securities were classified as cash and cash equivalents on the accompanying Consolidated Balance Sheets.
Funds held for clients represent assets that the Company has classified as restricted for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client funds obligations on our Consolidated Balance Sheets.

Funds held for clients have been invested in the following categories (in thousands):
20222021
Restricted cash and cash equivalents held to satisfy client funds obligations$147,032 $185,316 
Restricted short-term marketable securities held to satisfy client funds obligations9,174 5,559 
Restricted long-term marketable securities held to satisfy client funds obligations47,382 26,501 
Total funds held for clients$203,588 $217,376 

Expected maturities of available-for-sale securities as of December 31, 2022 are as follows (in thousands):
One year or less$9,174 
After one year through five years47,382 
 $56,556