Is A PEO Right For You?

How can today’s entrepreneurs and small business owners compete with many of their larger rivals? That’s easy—steal a page from their playbooks.

Over the last decade, many large businesses have leveraged a business phenomenon known as business process outsourcing, or BPO. The concept is simple. The company focuses on their core competencies—its products and services, customers, marketing, etc.—and outsources critical, yet noncore, functions.

Today, many small businesses are leveraging this approach as it relates to human resources by engaging the services of professional employer organizations, or PEOs. As the name implies, PEOs can assume most of an employer’s administrative responsibilities and much of the liability as well.

Through a contractual relationship with a PEO, a small business (the average member of the National Association of Professional Employer Organizations [NAPEO] has 17 employees) can create a co-employment arrangement in which the small business retains essential management control over the work performed by the employees while the PEO assumes responsibility for producing payroll, withholding and remitting payroll taxes, and providing workers compensation and health and welfare benefits.

PEOs can reduce its clients’ exposure to liability stemming from allegations of wrongful termination, discrimination, and sexual harassment by helping draft employee policy handbooks. In addition, PEOs frequently offer employment practices liability insurance that protects both the PEO and its clients.

This type of business process outsourcing helps small businesses attract and retain quality employees and minimize costly employee turnover. Because PEOs aggregate hundreds or even thousands of small businesses, they can create economies of scale in health insurance, workers compensation insurance, technology (PEOs often provide employee Web portals), and human resource support. PEOs level the playing field for small businesses by providing them with a large company human resources experience.

Here are some things to consider when engaging a PEO:

• Look for PEOs that are flexible and can meet your human resources needs. 
• Understand how the PEO’s employee benefits programs fit into your overall employee compensation. Can the PEO help you determine overall employee compensation? 
• Ask for client and professional references. 
• Make certain that the PEO is licensed if required in your state. 

Carefully review the service agreement, which can be lengthy and involved. A typical initial service agreement covers 12 months. Anything shorter could be construed as a temporary employment arrangement and therefore potentially subject to taxes.

PEOs can free you up to run your business and attract and retain great employees so that your business will thrive, not just survive.

By: Joe Cole, NAPEO CEO

Are you, the HR Manager, Held Responsible?

Yes, you are.


Employers and their HR Managers are responsible for labor law compliance. More than ever, HR managers are under pressure to ensure that their companies employment practices are correct and fair. Failure to do so and show good faith effort attempts to comply can lead to catastrophic claims paired with fines and back pay that no employer is ever prepared to pay.


Now you, the HR Manager, are being held personally liable for the files your responsible for. You can be charged and you can be fined.


As the HR Manager, you should be aware and able to explain the following:

• Job Titles and Descriptions are maintained and current
• All employees are classified as either Exempt or Nonexempt
• Basis for Exemption classification
• If anyone under 18 years of age is employee
• If uniforms are required and how deductions are applied
• Deductions to employees do not result in wage being reduced below minimum wage
• If and how employee are paid for orientation, training time and medical test
• If shift rates exist
• How time is recorded
• How overtime is paid
• Any practices of rounding or automatic deductions
• How employee wage garnishments are calculated, maintained and paid
• Company policies and forms relating to the Family and Medical Leave Act

If you're unable to answer one or more of the items listed above then you likely have one or more practices that are non-compliant that would cost you should you be audited.


TrendHR can help! Contact us today for an internal audit! 1-866-582-1578

Form I-9 Common Errors

Are you in charge of HR? Employee Files? Well you are responsible for ensuring employee file compliance!

Now days you, yes you, can be held personally liable for hiring and continuing to employee individuals not authorized to work in the United States. Protect your self and your company by reviewing your Form I-9′s and start making corrections TODAY!

Common Errors

ERROR: Liquid paper (white out), correction tape, scribbled out mistakes / any change obscuring information.

• CORRECTION: Staple new/clean Form I-9 to the back. Complete the section over that contained errors.

ERROR: Over documentation. Document details in List A and B and/or C. Can only have B&C or only A.

• CORRECTION: Staple new/clean Form I-9 to the back. Complete Section 2 only on the new form.

ERROR: Employee completed wrong section, Employer completed wrong section.

• CORRECTION: Simple mistake like a signature in wrong place, have person who made error cross through mistake, initial and date.

ERROR: Terminated employee’s Form I-9 has errors but couldn’t reach them to get the Form corrected.

• CORRECTION: Memo is completed, dated and attached to Form I-9’s for any terminated employees with missing or incorrect information. Documenting this shows the employer made a good faith effort to have corrected Form I-9’s.

ERROR: Errors are large or in several places.

• CORRECTION: Staple new/clean Form I-9 to the back. Complete all sections. Dates must be current, cannot back date.

ERROR: Missing, Lost or Never Had a Form I-9 on file for Employee (Active or Terminated).

• CORRECTION: Active employees must complete Form. Attach memo stating date realizing employee did not have a form and all dates must be actual, not back dated. Terminated employees are to be contacted and attempted to correct. Notes and action must be logged to support good faith effort.

TrendHR can help! Contact us today at 1-866-582-1578!

Challenging Time for Businesses

In today’s challenging economic environment, business owners have to look for ways to increase efficiencies while reducing expense.

As we continue to try to stimulate the economy with implementation of small business, one of the most expensive and frustrating aspects for small business owners is understanding and complying with employment laws.

Along with the statutory requirements to provide workers’ compensation benefits, employers today are also faced with a gamut of other employment-related challenges such as ADA, ERISA, benefit requirements, not to mention hiring practices.

In recent years, there has been an increase in employment practices lawsuits which are not only frustrating, but expensive to defend. For most small business owners, the decision to go into business themselves surrounded a dream and special talent as well as an entrepreneurial spirit.

Most small business owners are not insurance experts, nor are they employment law attorneys. While the cost of workers’ compensation insurance has dropped significantly in the past several years, insurance is an industry that cycles up and down and employers are generally at the whims of those market cycles, making it unpredictable to budget into their business model.

Defending employment practices claims can cause a small business owner to go out of business if they don’t have insurance to protect themselves.

One solution to the increasing challenges presented to most businesses is utilization of aProfessional Employment Organization, or PEO. A PEO provides services such as payroll administration, workers’ compensation, safety services, human resource management, along withemployee benefits, if desired. By entering into a contractual co-employment relationship, business owners can transfer or outsource most of, if not all, of their human resource issues to experts and focus on the business itself.

A PEO can be a more competitive way to manage those aspects of the business. PEOs have been around for years and there are many different companies out there.

Some focus on payroll services with human resource services and products added on an á la carte basis while others are large publicly trades companies that offer profit sharing to their clients.

Most business owners approach their insurance program renewal dates dreading the process and results. It takes time and energy to evaluate the many options — time that could be better served focusing on the business of business.

PEOs often offer increased cash flow by eliminating deposit requirements, stabilizing expenses while eliminating the need for the annual renewal process and removing the cyclic nature of the insurance industry allowing business owners to better plan and budget these types of expenses.

In today’s challenging business economy, one alternative might be the use of a good PEO. To learn more about a Professional Employer Organizations, go to www.napeo.org.

By Andre Olivan

The Perks of Professional Employer Organizations

Does this scenario sound familiar? You are a small business owner in the computer technology field and you have recruited the best talent in the area. You landed a large contract for services with a local company, you covered all of your bases and you’re ready to rock and roll … or are you?

Are you certain that your new-hire procedures are in compliance with your local employment laws? Are you up to date on the regulations that govern your benefit plans? Do you know all of the laws you have to follow that relate to the workplace? Chances are you don’t. In this situation, aprofessional employer organization (PEO) may be the answer you need to ensure your company not only thrives, but stays competitive in your industry.

PEOs originated when accounting firms started providing human resources-related services to their small clients. They expanded their standard accounting services to include payroll processing, payroll tax filing and other HR administrative functions. The difference between a PEO and other HR or payroll-outsourcing companies is the unique “co-employment” relationship between the company’s worksite employees and the PEO. The PEO, as the statutory employer, assumes the responsibility of specific employment-related liabilities. In this relationship, you as a small business owner do not have to be an expert on workplace regulations, since the PEO handles that for you.

The basic services offered by a PEO include:

• Payroll Processing
• Payroll Tax Filing
• Risk Management
• Workers Compensation Administration
• Unemployment Administration
• Benefit Administration

Furthermore, many PEOs offer additional HR services for an additional fee. In most instances, the client company retains complete control of the recruiting, hiring and firing processes. The PEOensures the client is in compliance with current employment laws. Additional fee-based services can include: employee and supervisor training programs, performance reviews, employee counseling, preparation of policy and procedure manuals and creation of employee handbooks.

There are two primary advantages for a small business when it comes to retaining PEO services. First, the PEO’s trained HR professionals perform the payroll and HR functions. The client company can focus on growing their core business. An individual at a small company who has “taken on” these HR duties may lack the required experience and understanding of all the rules and compliance complexities surrounding employment administration. Researching employment regulations, processing payroll and filing tax returns takes time away from the client company’s primary business, costing the company money. Until the company reaches a size that allows for a full-time HR professional, enlisting a PEO is a cost-effective alternative.

In my experience, I have found that a PEO is an excellent alternative for small businesses. A PEOallows client companies to concentrate on what they do best. At the same time, the PEO helps the company differentiate itself from its competitors by giving them a recruiting and retention advantage. After all, in the end, it’s all about getting ahead of the competition.

By: Anthony Jernigan

Form I-9 Section 2 & 3 Overview - Part 2

SECTION 2 - Completed by the EMPLOYER

List A - One Document Only

• Cannot be completed in conjunction with B & C documents.
• Employer verified approved documents selected by employee.
• Complete title, issuing authority, document # and expiration date (if any).

List B - 2 Documents

• Cannot be completed in conjunction with B & C documents.
• Employer verified approved documents selected by employee.
• Complete title, issuing authority, document # and expiration date (if any).

Certification

• Completed by employer representative who verified documents for authorization to work.
• Must be authorized and completed with 3 days of hire.
• Representative must print and sign name and date .
• Business name and full address must be completed.

SECTION 3 - Completed by EMPLOYER

Updating & Recertification

• Update if employee is rehired, changes their name or has a new authorization document as the previous document expired.

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