Tag Archives: professional employer organization

Where does my liability start and where does the PEO pick up?

With PEO – Professional Employer Organization, the owner/client is not liable for workers compensation nor unemployment claims.  In some instances, the PEO offers EPLI (employment practice liability insurance) to cover workplace torts such as sexual harassment suits or wrongful termination suits. 

Would you hire a dog to represent you in a lawsuit?

Or worse, would your represent yourself?  Of course not.  You would hire a lawyer. 

Well, first you would ask friends, family and other business associates for their recommendations.  Then you would meet with a handful of these recommendations.  Make a decision based on their expertise and your specific needs and away you go.  Right? 

Why not take the same steps when thinking about your company’s human resources?  Most likely, if you are a small business, the idea of hiring a certified HR professional is daunting.  The labor cost for that individual is prohibitive. 

Your employees are most likely your most valuable asset, but they can turn on you.  That is why a professional employer organization (PEO) is the most cost-effective way to keep your employees happy.  And trained. 

Timing is everything for HR outsourcing…

…and yet it is nothing.

For a company to consider some HR outsourcing solutions, such as PEO (professional employer organization) or ASO (administrative services organization), there is often a breakdown within the organization from a human resources or benefits cost or risk management standpoint. 

The right HR outsourcing solution can help a company weather these storms, or avoid them all together.  There is often a cost, of course, but it is cheaper before than after the storm has hit.

Sometimes

HR outsourcing and PEO

When going for an HR outsourcing or PEO solution, it helps to know the subtle differences between the available models. 

One of the key components of PEO (professional employer organizations) that is overlooked is the employer liability.  With a PEO, since a company has partnered with a PEO, the PEO is responsible as the “employer of record.”  Thus off-loading any workers comp or unemployment claims to the PEO.  With other models…since they are not the employer of record, any fines or state of federal issues are the problem of the client.

California (or other) State Workers Comp Funds

Moving to an HR outsourcing company, particularly a PEO (professional employer organization) can have tremendous benefits when dealing with workers compensation insurance as it pertains to State-sponsored funds.  One major state-sponsored fund, the California State Fund, will be seeing a large increase in rates in the coming months.  There is a great opportunity for all businesses to reevaluate that relationship to see if there is a better way of doing business.

How can PEO’s help these businesses?  By getting you out of the fund entirely and partnering with the PEO  and placing your risk (employees) on their books.

From our experience we have seen discounts on workers comp by as much as 50 percent.  In addition, the comp coverage becomes a pay-as-you-go solution, freeing up your cash flow.