HR Outsourcing Solutions

Federal 2010 Budget Provisions Effect Employee Leasing and PEO Arrangements.

2009-06-10T08:25:00.006-04:00

Bruce Silver
Employers Rx LLC

President Barak Obamas recently announced 2010 budget proposal contains some payroll-related provisions that will have a major impact on the way that payroll taxes are reported after December 31, 2009.
Currently, there is uncertainty as to whether the employee leasing company or its client is liable for unpaid federal employment taxes arising with respect to wages paid to the client’s workers. When an employee leasing company or professional employer organization files employment tax returns using its own name and employer identification number, but fails to pay some or all of the taxes due, or when no returns are filed with respect to wages paid by a taxpayer that uses an employee leasing company, there can be confusion as to how federal employment taxes are assessed and collected.

The proposal establishes standards for holding employee leasing companies jointly and severally liable with their clients for federal employment taxes. The proposal also sets standards which will place responsibility for, and hold employee leasing companies and PEOs solely liable, for payment of taxes in some cases. The provision would be effective for employment tax returns required to be filed with respect to wages paid after December 31, 2009.

Employers Rx Among Odesk.com's 100 Best Outsourcing Blogs

2009-06-03T17:44:00.005-04:00

HR Outsourcing consulting firm Employers Rx LLC, is proud to announce that their blog, HR Outsourcing Solutions, was included among the top blogs in the HRO and PEO field. The blog was recently named by Odesk.com as one of their 100 Best Outsourcing and Offshoring Blogs, and was recognized as one of only four in the category of Human Resources. Odesk.com’s Tamara Rice observed “Of course, Employers Rx is not just offering their services, but advice for HRO agents too. Go straight to this HR outsourcing archive and start reading–not all articles are original content, but all are relevant.”. Also honored were blogs from HR Outsourcing, Outsourcing-HR, and industry-leading professional employer organization TriNet HR.

The popular blog, HR Outsourcing Solutions, has been an informative online resource from it’s first entry in July 2007. On an early Sunday morning, company founder Bruce Silver sat down at his computer. “I had just finished reading an article on Bnet.com about Google’s website Blogger. I came up with the crazy idea that I could do that too. The result wasn’t pretty, but it was a start” he said. From that time forward the blog has provided it’s readers with helpful tips for small business owners and entrepreneurs. Topics have included saving on group health insurance, HR compliance, payroll, workers compensation, and how to shop for an employee leasing company or professional employer organization.

HR Outsourcing Solutions will be incorporated into their newly redesigned Employers Rx LLC website, which is scheduled for launch next month. Make sure to visit us by bookmarking our website: http://www.employers-Rx.com.

A Day In The Life Of A HRO PEO Consultant

2009-05-18T18:44:00.002-04:00

Bruce Silver
Employers Rx LLC

On any given week, Employers Rx LLC has between five and ten accounts in various stages of our (RFP) request for proposal process. If you have personally shopped for an employee leasing company or professional employer organization, then you know first hand, what a daunting experience it can be. You’re aware of all the questions they ask, the forms you have to complete, the company and employee information they require, the emails, phone calls, reams of paperwork they create, all the time wasted and productivity lost.

Now imagine dealing with six sometimes eight different HR companies, responding to questions from underwriters, risk managers, sales managers, all wanting in depth information about your company, in a certain format, on their forms, and the list goes on. If that is not enough, imagine what it can be like when you are doing this for eight or ten clients a week. Welcome to my world.

Our clients this week include an intimate apparel company with locations in NYC, PA, and Bentonville, AR, a 5 state property management company based in Chicago, a public company who provides medical staffing nationwide, a manufacturer of ATV accessories in IA, a publisher in Stuart, FL, a medical supply company in Rochester, NY, and 2 more. These accounts represent almost 400 full and part time employees with over $25 million in annual payroll. Our first goal is secure the most competitive rates for our clients, bona fide offers the first time,without any conditions, additional fees or hidden costs.

A typical day starts around 5:30am, after walking the dogs, I sit down with my first cup for freshly ground coffee and check the batch of overnight emails. I am greeted by a message from one of the “Big 3” PEO’s complaining that our client’s RFP has their health statement filled out on a competitor’s form, and that his underwriter would not accept it. As with many of our clients, providing affordable health insurance coverage for their employees is a major problem. In this case, the client has been happy with Aetna for years. Usually, we send out our own generic health questionnaire. Since this client’s RFP will only be submitted to PEO’s that have a master plan from Aetna, we opted for an “official” Aetna group health statement. Never again.

Unfortunately, this was only half of the complaint. The “Big 3” PEO also requested the client’s most recent payroll run. Our client has some seasonal employees, and was thorough enough to provide us with a breakdown by state and code of their expected annual payroll. This was in addition to providing the last quarterly report. Because it wasn’t their last weekly payroll run. My rep would have to call his VP for an exception. After a flurry of emails, phone calls, and even a personal visit by their executive VP, I am happy to report that exceptions were made, and our client has finally received a competitive proposal.

My next email was from another professional employer who I call “Big 5”. He too is complaining that our client provided information on a competitors form, but was willing to make an exception. However, he had issues with another client’s RFP. Once again, group health insurance is a primary concern. Our client has 5 former employees covered under COBRA, and the “Big 5” underwriter wants birth dates and termination dates before they can make a firm offer with set rates. It has only taken us six weeks to get to this point, another few days won’t make a difference? NOT.

What frustrates us the most is trying to get all of the required information from our clients. Very often we are working directly with the business owner who is wearing so many hats, they rarely have the time to compile the payroll, workers compensation, and health insurance documentation we need. Even when dealing with a company’s HR Director, comptroller or office manager, getting all the forms completed and returned in a timely manner, despite all the technology, still remains our greatest challenge.

We welcome any and all suggestions, and if you’re a prospective client, we appreciate your cooperation in assisting us to do the very best job we can, for you and for your organization. Thanks again for the opportunity.

Employers cannot prematurely claim COBRA credit

2009-04-23T08:11:00.002-04:00

Bruce Silver
Employers Rx LLC

The American Recovery and Reinvestment Act of 2009 has added to the already complex and overwhelming administrative burden that employers are responsible to comply with. COBRA regulations are just another example of the patchwork of regulations designed to plug the holes in our corporate for-profit health insurance system. Notice! I did not say "healthcare" system.

Notice! I did not say "Healthcare" system.

A "Healthcare" system addresses the actual delivery of health care services. Insurance companies have nothing to do with providing services, they are simply put .... a funding mechanism. These companies, indeed institutions, have developed and implemented a convoluted system for transferring payments from "consumers" to service providers while wasting billions of dollars on claims administration, legal, lobbying, marketing, sales and underwriting expenses. This doesn't account for billions more in executive salaries and stock options, and billions more expended by doctors, labs, hospitals, and pharmacies in order to navigate their systems.

We "Can" Do Better!!!

Until then, read the latest from the Department of Labor and the Internal Revenue Service.

Employers cannot claim the new COBRA premium assistance credit until they receive the 35% payment from the former employee, Treasury Department and IRS officials said on April 6. Additionally, being called up to military duty may be an involuntary termination triggering eligibility for the credit, they clarified. The Treasury and IRS officials spoke during a webcast about COBRA premium assistance sponsored by the Department of Labor (DOL).

Premium reduction. Individuals who are involuntarily separated from employment between September 1, 2008, and December 31, 2009, may be eligible for temporary COBRA premium assistance. The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) (2009 Recovery Act) allows dislocated workers to pay 35% of their COBRA continuation premium and be treated as paying the full premium. Employers will pay the remaining 65%.

The 2009 Recovery Act also provides a limited second-chance window to elect COBRA coverage. The subsidy is generally available for nine months.

The IRS and the DOL have posted frequently asked questions (FAQs) and other information about the COBRA subsidy on their websites The IRS issued formal guidance on April 1, 2009. "We focused on issues we could reach quick consensus on," Russell Weinheimer, senior counsel, IRS Office of Chief Counsel, said.

Payroll tax credit. Employers will be reimbursed for their 65% COBRA premium assistance through a payroll tax credit, Patricia McDermott, special counsel, IRS Office of Chief Counsel, explained. However, the credit cannot be claimed until the employer receives the 35% payment from the covered individual, she cautioned.

In some cases, entities other than employers will claim the credit, McDermott explained. If the COBRA coverage is provided by a multiemployer plan, for example, the plan provides the subsidy and is reimbursed by taking a credit on Form 941.

Rather than claiming the credit, an employer may offset payroll tax deposits during the quarter by the amount of the premium, McDermott said. Additionally, the employer can elect to have any excess credit applied to next quarter liabilities, rather than accepting a refund from the IRS.

Military service. In March, Treasury Department and IRS officials indicated that being called to military duty is not an involuntary termination for the COBRA subsidy. Now, the government has revisited that position, Kevin Knopf, attorney-advisor, Treasury Office of Tax Policy, said. "We are going to consider (call up to military service) involuntary termination of employment."

Premiums. Generally, plans can charge 102% of the total cost of coverage. The employee's 35% share is calculated against the 102% amount, Weinheimer explained. "If the employer charges less (for COBRA continuation coverage) than the maximum amount allowed by law, the 35% reduction applies to that lower amount."

Notices. The 2009 Recovery Act requires employers to send a general notice to all qualified beneficiaries, whether they are currently enrolled in COBRA coverage or not, who have a qualifying event between September 1, 2008, and December 31, 2009. The general notice goes to qualified beneficiaries and not just covered employees, Amy Turner, senior advisor, Department of Labor, explained. A qualified beneficiary may be an individual whose qualifying event was divorce or aging out of dependent coverage.

A notice of the special second-chance COBRA election must be provided to any covered employee who did not elect COBRA coverage between September 1, 2008, and February 16, 2009. Individuals who elected but later discontinued COBRA coverage also must receive the second-chance notice. The notice of extended election must be provided by April 18, 2009. The DOL has posted model notices on its website.

Can HR outsourcing help companies endure the recession?

2009-03-15T08:17:00.009-04:00

When The Going Gets Tough, The Tough Call For Help

By Livia Gershon
Worceste r Business Journal

“I’m so excited about this year. It’s great.”

That’s a sentiment you won’t hear from many company presidents these days. But Ultan Feighery is in an unusual position. He’s the president and founder of The Human Resources Organization in Westborough, a human resources outsourcing company. And he says HRO has seen a 25 percent jump in new business in the first two months of 2009.

To Feighery, it makes sense that companies facing shortfalls would bring HR functions to an outside vendor to save money. But others in the field say it’s far from clear that business leaders want to take the jump into outsourced HR at a time when so much else is uncertain.

Cafeteria Options

The Human Resources Organization, which Feighery founded seven years ago, offers employers a variety of services to choose from. It can manage 401(k) plans, run payroll and offer on-site or on-call support. It also acts as an insurance agent, looking for good deals for clients without being commission-driven like traditional agents. Feighery said the company can help clients not just by replacing permanent HR staff but by figuring out better ways to deliver benefits.

“In 95 percent of cases we can find significant savings,” he said.

Bob Eubank, executive director of the NorthEast Human Resources Association, said there’s no doubt HR outsourcing has established itself as a viable industry over the past decade. But he said it’s not clear whether it’s become more or less prevalent since the economy went into decline. Sometimes the outsourcing possibility costs more initially for longer-term savings, and that may not be an attractive option right now,” he said.

Sandra L. Reynolds, executive vice president of The Employer’s Resource Group at the Associated Industries of Massachusetts, said she’s heard of increases in outsourcing only among businesses that feel they need to reduce their own staff. "We’re just starting to hear about companies that are kind of facing the realities that they either might or will have to do that,” she said.

Next Best Option

Reynolds said her group, which offers its own HR products, has definitely seen an increase in the use of its hotline. “When you have fewer internal resources you use external resources at a higher level,” she said. Mike S. Lanava, business resource manager at the Worcester Regional Chamber of Commerce, said he hasn’t noticed HR staffers being replaced by outsourcing in recent months. “I haven’t been so much aware that there have been layoffs of complete departments,” he said. Still, he said he does think the long-term trend is moving toward greater use of external HR resources.

Largely because government compliance rules are becoming more complicated, Lanava said, many companies are going to HR specialists for particular needs. The companies may help them develop a sexual harassment policy and provide training videos, write up a maternity leave plan or offer customized safety training.

While some law firms and a handful of large, national companies always provided those sorts of services, Lanava said, more small players have been emerging to offer them in recent years. “What I’m seeing is more smaller local things that are tailoring their packages to the local companies,” he said.

Still, there can be a backlash against the outsourcing of HR, especially if it’s not done well. Reynolds said some large companies that once outsourced HR functions are bringing them back in-house these days. “Some of them are finding that it solves some problems but it also creates some problems,” she said. Eubank said one big problem can come if employees don’t have a particular person they can go to with job-related issues. For that reason, he said, many companies use a mix of in-house and outsourced resources.

That’s just fine with Feighery. He said his company makes sure to let potential clients send them as large or as small a chunk of their HR operation as they want. After they try the company out, he said, they often decide they want to add more services.“Last year, 85 percent of our clients added more than 30 percent to the products that they bought,” he said. “You put your toe in the water.”

From the Editor.

The story never changes. When times are good, business owners seem to think that little is broken within their organization or operations. When times become challenging and budgets tighten, many managers and executives look for innovative ways of cutting costs without sacrificing service or quality.

Send us your HR outsourcing success stories to hrsolutions@employers-Rx.com or contact us directly at (877) PEO-CURE or (877) 736-2873.

Survey Finds Nearly 20 Percent of Employers Plan to Drop Health Benefits

2009-03-11T06:16:00.001-04:00

Nineteen percent of employers responding to a new Hewitt Associates survey are planning to stop offering health benefits over the next three to five years, nearly five times as many as the 4 percent that said they were planning an exit strategy last year.

For those employers planning to continue to provide health benefits, keeping employees healthy has become the primary workforce issue in 2009, up from the No. 2 position in 2008, according to Lincolnshire, Illinois-based Hewitt’s survey, “The Road Ahead: Emerging Health Trends 2009.”

“Promoting employee accountability” was ranked the chief health and prevention component of employers’ health care strategies in 2009, followed by “offering competitive benefits” and “managing health risk.” In 2008, employers selected “offering competitive benefits” as their chief objective, followed by “promoting accountability” and “tightly managing health care cost trends.”

“In today’s environment, employers are under pressure to cut health care expenses, but they realize that short-term cost-management tactics do not address the underlying drivers of health care cost,” Jim Winkler, head of Hewitt’s North America health management consulting practice, said in a statement. “This leaves them with two options: making a long-term commitment to improving the health of employees and their families, or exiting health care altogether.”

Among other survey findings:

• More employers are targeting specific health conditions within their employee populations than in previous years. Specifically, employers are targeting asthma, cardiovascular disease, depression and diabetes.

• When employers were asked to what extent health care reform proposals outlined by the Barack Obama administration would affect their current health care strategies, 51 percent said they would have some impact, while 44 percent said it would have no impact.

• While one-third of executives think the Obama administration and Congress should address health reform in the president’s first year in office, 63 percent believe it will take place in Obama’s first term.

• Moreover, 60 percent of executive said the federal government should take the lead, while 33 percent said the federal government and the states should share responsibility.

A total of 343 benefits executives from a broad spectrum of industries responded to the survey, which was conducted from December 2008 to January 2009.

For more information about the survey, contact Maureen Mersch at maureen.mersch@hewitt.com or Mary Ann Armatys at maarmatys@hewitt.com.

Staffing - The New Growth Industry?

2009-01-25T08:19:00.014-05:00

Bruce Silver
Employers Rx LLC

Employment agencies and staffing companies across the country are announcing a "pick-up" in volume. Of course many are admitting that it is due to the record number of layoffs, as well as an increase in applicants who are willing to accept part-time or temporary positions, while waiting for better times ahead.

Indeed, many industry observers like Jack Rainer, owner of Career Personnel Services in Montgomery, Alabama expect that it can' last. He predicted there would be some hiring rebound before the economy begins to recover. Some firms will find they have cut too deeply in layoffs and will need to replace lost staff, he said. It will take time for people to digest what is going on, but they still have needs".

What I find valuable in this Montgomery Advertiser article written by Cosby Woodruff are the observations of Anna Doeren, a stafffing specialist at Career Personnel. She recognized that job cuts have progressed beyond those in purely clerical jobs to more senior positions. "It is lower-level administration to middle managers, a lot of that has been cut."

"One area where they are seeing more demand from companies is in providing outsourcing of human resources functions. People are contracting us to be the human resources manager. Many of them have cut out their HR departments."

What Anna and Jack may not be aware of, is the increasing trend by many of the most successful and innovative companies in their industry to provide a full range of services for employees from "hire to retire". I am referring to the fastest growing industry in the gamut of HR services commonly referred to as "RPO" or Recruitment Process Outsourcing.

Recruitment Process Outsourcing refers to a business service where an employment or staffing agency not only finds a suitable applicant for a particular position at a client's worksite, it also can include training, payroll, group health benefits and workers compensation coverage. In effect, it is the recruiter who is employing the worker, and is responsible for HR compliance and adhering to Federal, State and local employment regulations.

PEOs - The Outsourcer's Resource

With few exceptions, these functions are being outsourced to companies who actually do this work. Let's face it. Most successful employment agencies and staffing companies are owned and managed by individuals who are very good at finding and placing suitable candidates for their clients. Many are great at developing relationships with employers and HR managers, but lack then administrative and insurance background to tackle all the areas involved. Only the largest firms have the resources to invest in the infrastructure and technology platforms required to efficiently support an full service RPO effort.

While the majority of employee leasing companies and professional employer organizations refuse to accept employment agencies and staffing companies as clients (many have incurred significant workers compensation claims ) there are handful of quality PEOs who have established a working partnership within the staffing and RPO industry. These firms have developed a "niche" by better understanding the unique challenges, products and services that enhance an agency's ability to compete and succeed in these demanding times.

Employers Rx has many staffing clients who have developed successful long term relationships with their PEO partners. If you own or manage an employment agency or staffing company and are considering making the leap into the "RPO" Recruitment Process Outsourcing marketplace, our experienced professionals are available to discuss your options and opportunities.

Health benefit costs continue to rise, survey shows

2009-01-21T07:30:00.006-05:00

Bruce Silver

Employers Rx LLC

After over 25 years of trying to help small business owners and entrepreneurs to provide affordable, quality health insurance coverage for their employees, it seems that with all the changes and industry "innovations", very little has actually changed.

Health insurance still remains problem number 1 or 2 for the average business regardless of size.

I have a saying that often evokes laughter, unfortunately, being able provide and afford quality health insurance is not funny, especially if you have a sick child who needs care.

"If you want to make an enemy, sell them health insurance."

Bruce Silver, Founder, Employers Rx LLC

Why do I say this? It's because you are always delivering bad news. Year after year at renewal time , you inform your clients that their premiums have been increased. Some years, it's only 10% or 15%, lately their increases have ranged from 20% to 50%. Where are the regulators?

The bad news does not stop there. Most employers cannot afford to absorb the increase so they look to you (me) to FIX it. But how? Well the only way is to reduce coverage and decimate the benefits that employees receive. So the doctors office copay goes from $10 to $20 and today most plans have $25 and $35 co-pays. If you are going to see a specialist, you can expect to have a $50 co-pay or higher.

But that is only one side of the coin. Not only are employees paying more for everything from doctors visits, diagnostic tests, medications, and heaven forbid - inpatient stays, but they are paying a higher share of premiums as well. The system is clearly broken.

Here is another attempt by industry insiders trying to put a positive spin on more bad news from Employee Benefit Adviser

Health benefit costs continue to rise, survey shows

New data by Towers Perrin suggests that employers will pay, on average, $9,552 per employee for health benefits in 2009, a jump of 6% from 2008. Yet some employers will buck the trend because they proactively manage their benefit programs.

In its 2009 Health Care Cost Survey, the HR consulting firm reveals that high-performing companies, those who rigorously track their health benefit objectives, will spend, on average, 12% less in annual health care premiums in 2009, compared to low-performing companies.

For example, high-performing firms report a per employee cost of $8,904, compared to $10,104 for low-performing companies. The cost variation fell even lower ($7,032) at high-performing companies utilizing consumer-driven health plans with health savings accounts.

The survey defined high performers as companies who not only had a strong commitment toward improving employee health and engagement, but who also aggressively managed their health plans and the delivery process.

###

Fortunately, our team at Employers Rx LLC has found an answer for many small business owners, HR executives, and entrepreneurs.

Check out my interview with David Weir of the South Florida Business Report to learn more. Click on the You-Tube link or contact us at (877) PEO-CURE.

Workers Compensation Savings with a PEO - How Employee Leasing and Professional Employment Companies Do It?

2008-12-30T06:36:00.013-05:00

By Bruce Silver

Employers Rx LLC

Workers Compensation Savings with a PEO - How Employee Leasing and Professional Employment Companies Do It?

You have read all of the claims how employee leasing and professional employer organizations can reduce your workers compensation costs by 10% or 20%. If your company has developed a high experience mod rate as a result of a large "shock" claim, or claims that may be questionable, it is possible to receive rate reductions of over 25% from employee leasing companies that are competing for your business. Have you ever wondered how this is possible? How do PEOs do it?

The Rule of Large Numbers

All employee leasing companies carry workers compensation coverage just as any small business is required to do (except Texas). However, because they are "pooling the risk" of hundreds of companies and thousands of employees, they have the ability to "self insure" the risk up to a certain amount, the deductible. Some PEOs purchase workers compensation policies that pay only after the first $250,000 of a claim, others are responsible for the first $500,00.

Skin In The Game

What does this mean for the small business owner who is with a PEO or employee leasing company? Because PEOs really have "skin in the game" when your employees submit a claim, and claims paid come from reserves that will be returned as profits, it is much more likely that claims will be vigorously investigated and contested than in the standard markets.

Some employee leasing companies have more flexibility than others. They can offer small employers unique WC programs containing a claims "cost sharing" arrangement that can further reduce your rates and improve cash flow. Your company assumes more of the risk, but shares in the rewards of maintaining a safety conscience and healthy workplace. Workers compensation programs like this and others, are not available to small and midsize companies because of insufficient premium. Entrepreneurs and business owners who take advantage of the benefit's of using a PEO, now have the ability to compete, and beat a larger company when bidding for that "prize" contract.

Caveat Emptor - Let The Buyer Beware

You've learned how most large employee leasing companies and PEOs essentially "self -insure" their workers compensation risk. It is equally important to understand that the ratings of the insurance carrier hardly matter because they will only be responsible for expenses that exceed the plan deductible. Since only the most traumatic claims with extensive medical bills and long term disability will be covered, it much more important to know the financial soundness of the employee leasing company or professional employer organization.

Below is a press release from Gevity, a leading professional employer based in Bradenton, FL.

Gevity Announces 2009 Workers' Compensation Insurance Renewal

BRADENTON, Fla., Dec. 30, 2008 (GLOBE NEWSWIRE) -- Gevity (Nasdaq:GVHR), a leading professional employer organization (PEO) that provides HR services to businesses nationwide, today announced that the Company has renewed its 2009 workers' compensation insurance agreement with member companies of American International Group (AIG) Commercial Insurance.

Consistent with 2008, Gevity will maintain a $1 million per occurrence deductible and will make monthly payments to AIG for program costs and estimated future claims costs in the form of loss collateral funds, which will be approximately $17 million lower in 2009. Garry J. Welsh, Chief Financial Officer, commented that "We are very pleased with the terms and conditions of our renewal for 2009. Moreover, we are encouraged that our effective risk management practices and continuing favorable trends in claims costs have resulted in lower loss collateral funding requirements from AIG."

Another Professional Employer Organization Horror Story

2008-12-29T20:24:00.007-05:00

By Bruce Silver
Employers Rx LLC

Another Professional Employer Organization Horror Story

I came across an interesting website developed by Mr. Ed Shull called Filthy Lucre. Ed owns and operates USWeb LLC, a small online marketing and website development company based in Henderson, Nevada. Ed's website Filty Lucre not only is a showcase for his talented firm's programming capabilities and techniques, but he created a thought provoking community where visitors and members can post and exchange photos, videos and join in the "conversation".

From: "You Can't Make This Up" Department

The website has many interesting articles on a wide range of subject matters, including Health and Medicine, Lifestyle, Money and Community. While checking out some of the articles and comments, I came across a section aptly entitled The Working Affluent. The next thing to catch my eye is the headline - Complaints about TriNet HR Services.

Ed had recently signed on with TriNet HR Services for his small company at the relatively small fee of $1,860 per employee. Almost twice the average industry rate of $1,000 - $1,200 per employee.

Like I said, you can't make this up.

By Ed Shull, CEO USWeb LLC

I’m not a paperwork guy. As the CEO of a small business, with a few contractors (that really felt more like employees after a while), I decided that if I was going to take the step to have employees, I would need to do it right. I wanted to make sure I offered a competitive compensation package that included 401k, health insurance, life insurance, etc…

So I started to search around for ways solutions I came across a company that was referred to me a few years ago, Trinet. Trinet offers HR services as a PEO (professional employment organization). People often refer to this as employee leasing. Think of it as hiring whoever you want through a temp agency like Kelly Services. They take care of all the tax and insurance paperwork, and you just pay the agency a fee as a vendor. The fee was relatively small at $1,860 per employee, per year, so I decided that this would be the best of both worlds.

The Sign Up Process for Trinet

I have to say that of all the vendors I have ever worked with, none seemed so utterly incompetent as Trinet when it came to the sign up process. They would send over documents without instructions, or that were dated wrong. They would lose stuff I sent. The best part is that I would go through long spurts of not hearing from them, after confirming that everything was ready to go, and then all of sudden get a flurry of emails from them marked as urgent, saying they needed more paperwork from me.

Once, and I swear this is true, I was told weeks before that we were truly ready to go. There would be no further delays. A couple days before the payroll date, I contacted my rep there to ask about the amount they would be taking out. I didn’t hear back. But then , a day or two before payday, I get around 3 - 4 emails, all marked urgent, saying I need to call them right away. I happened to be out of town, so I didn’t get these messages until around 2pm. I called the main rep, she wasn’t around. So I called another rep I had dealt with, who had also emailed me saying I needed to call him and that it was urgent. When I got a hold of him and asked what they needed, he said, I and I swear this is true, he didn’t know. So they had spent most of the morning trying to reach me, but didn’t know why. I asked him if my payroll was going to go out. He didn’t know.

Payroll didn’t go out that week, so once again I had to scramble to cut checks myself. This went of for literally months. The best part is, they charged me retroactively for this time with the insurance. Insurance my employees weren’t aware they had. We had received no ID cards or selected any plans yet. But of course I had to pay for it.

The ongoing problems with Trinet

Since we worked out those initial issues, I would love to say things have gotten better, but I cannot. Each pay period is an exercise in patients, and comes with it’s own little set of grief. I have asked Trinet on numerous occasions to send me an email letting me know the exact dollar amount they attend on deducting. I set up a bank account specifically for payroll, and I need to transfer the funds into that account. Each time I ask, I’m assured that invoices are sent out ahead of time. The closest this has come unsolicited was last pay period when I got a notice after 3:30pm that funds would be taken out the next day. I got a follow up email from Trinet the next morning that they were unable to get the funds. So despite me asking for several days notice, I couldn’t even get a 24 hour notice.

One of the documents I filled out was to my bank, allowing Trinet to request a funds transfer. I had this hand walked into my banker, as well as got Trinet a copy in case of any issues. My bank has done things like this for me in the past without incident. And there have been no incident on the money transfer issue until this past payment. All of a sudden, after 3 - 4 consecutive successful transfers, Trinet is reporting my bank will not honor the request. They tell me this on Christmas eve and they want me to go to the bank “right away” to wire the fund manually. I explained to them that I was on vacation with my family and that they needed to work this out with the bank directly (that’s why they have a copy of that document), but for some reason it was determined that the easiest way for this to be handled was to have me go down to the bank on Christmas Eve. By the time we went back and forth on this, it was late enough that going to the bank was not an option. So they said I could cut my vacation short and go on the 26th.

Trinet had not real response to my question about why my bank would not honor the document I gave them. They just decided that it was too much trouble I guess. So as of now, employees checks have not been cut.

For the sake of not rambling on forever, I have actually not gone into other issues I have encountered with Trinet. I have not gone into the fact that none of the amounts they deduct make a lot of sense. But they are so screwed up, I know that if I open that can of worms, it will never be solved.

I do have to say that the main rep I deal with there, Angela, is quite nice. I feel genuinely bad when I start bitching about things to her because she clearly doesn’t control any of it. But she doesn’t strike me as overly surprised with all these issues. I get the feeling this must happen a lot.

There have also been issue with their website when trying to make changes for employees, or anything else. They brag that their technology is based around Peoplesoft. As someone who has worked with Peoplesoft, I know that’s not something to brag about. I have never seen a successful Peoplesoft implementation. And I don’t believe Trinet has either. It’s a crap system, and is likely the cause to much of Trinet’s issues.

So if you’re looking for something to make Hr a little more simple, I would not look at Trinet. I spend an obscene amount of time dealing with their issues, and apologizing to employees, which is exactly the opposite of what they are supposed to be doing. You’re better off looking to your bank or other places. I’m not saying that PEO’s or employee leasing is a bad model, I’m just saying that Trinet is not a company I would recommend trusting with your business.

A Sign of the Times - Recruiting Website Cuts 15% of Workforce

2008-12-12T08:40:00.006-05:00

Bruce Silver, Founder
Employers Rx LLC
December 12, 2008

Report: CareerBuilder Slashes Jobs

Another ominous headline. This one from the Washington Business Journal. Simply a sign of the times. It feels very much like the early 80's. Do you remember the oil embargo, odd and even days, rationing? Jimmy Carter was out, Ronald Reagan was in. Reagan broke the backs of the unions when he fired the air controllers. He brought in Paul Volker to wring out inflation, partially caused by high oil prices. He did it by ratcheting up interest rates which sent a slowing economy into a tailspin.

The saying then was "if you had a job you were in a recession, if not, it felt like the depression".

Washington Business Journal

by Jeff Clabaugh Staff Reporter

Hundreds of jobs have been cut at a company that is supposed to help people find jobs.

Job posting Web site CareerBuilder has slashed 300 jobs, or about 15 percent of its workforce, according to the Chicago Tribune. The cuts were across the board, but mostly in its small business segment, the Tribune reports, citing chief marketing officer Richard Castellini.

The cuts took place last week, the newspaper reported. (Happy Holidays)

CareerBuilder is majority-owned by Gannett Co. Inc. and Tribune Co., both companies that have struggled with dropping advertising revenue at their publishing businesses. Gannett has responded by cutting hundreds of jobs this year. Tribune this week filed for Chapter 11 bankruptcy protection.

“When we forecast our business for 2009, the growth rates we had anticipated weren’t going to be in line with where we were currently seeing the business,” The Tribune quoated Castellini as saying about the job cuts at CareerBuilder.

Gannett (NYSE: GCI) upped its stake in CareerBuilder earlier this year to 50.8 percent, buying part of Tribune’s interest for $135 million. Tribune still holds a 30.8 percent stake. Publisher McClatchy Co. (NYSE: MNI) and Microsoft (NASDAQ: MSFT) are minority owners.

Administaff - An Employee's Prospective

2008-12-06T07:59:00.004-05:00

By Bruce Silver, Founder

Employers Rx LLC

December 6, 2008

Administaff - An Employee's Prospective

I came across an interesting website this morning. It is aptly named JobVent.com .

The purpose of this website appears to be just that.

JobVent is the web site for anyone who has ever said 'I hate my job', or 'I love my job'. JobVent is the web site for people who are about to start a new job, and want to see what other people think of working there.

Topping the list for most hated employer was the Progressive Insurance Company, who scored a resounding minus -7708 from no less than 1181 reviewers. Coming in second place was, of all companies, the worlds leading human resource management and outsourcing organization, Hewitt Associates with a score of minus -4331. There were 269 Hewitt employees who took the time to let their feelings be known. By doing the math, I calculate that the level of dissatisfaction among Hewitt's employees is much greater than at Progressive.

Guess you might call this a case of the blind leading the blind.

While were on the topic. I was surprised to find a posting from an employee who apparently works for Administaff, a leading professional employer organization based in Kingwood, Texas. I say apparently because all postings on JobVent are anonymous. Here is one insiders view of Administaff, another HR outsourcing company who claims to be an employee management expert.

You be the judge.

Posting on JobVent 12/06/2008 - Administaff

The pay is the most I've ever had and they can afford that because they charge more than any other PEO. The benefits are better than most, but not the best I've ever had. I'd like to have better, but honestly we're struggling in our economy. I rated the job security as 0, but that's because this company prides themselves on never having a layoff....however they will drive you to the point to where you quit or they'll make reasons to let you go. Work/life balance is pretty good. They are really involved in the community. The PTO is decent. Just a couple of people with a few loose screws that try to control when you take your time off and how. They preach how you can grow with the company, but all I've ever seen is friends of friends get promoted and praised. The few supervisors I've seen that weren't friends with anyone, ended up leaving. The location is good for me because I live so close, but that's with anyone who works around the corner from their job. My coworkers know their work, but this is all they know. They have never worked with real software or in a professional environment. This place is pretty similar to putting a bunch of hillbillies in suits and asking them to be pro's. The work environment is the worst. The management claims they don't want to micromanage, when they very well do. They walk around the work area to spy on you and see if you're at your desk. God forbid you have to use the rest room because they'll question where you have been.

It appears to me that Administaff knows how to "Talk the Talk", but do they really "Walk the Walk"?

Common Mistakes of Shopping for PEOs and Employee Leasing on the Web

2008-12-04T12:34:00.009-05:00

By Bruce Silver, Founder

Employers Rx LLC

Third of a three part series.

What is Behind Door Number # 1, 2 or 3?

When searching the internet for a PEO, it is important for a busy executive to have some idea of what your needs are, and understand the process you are about to undertake, before starting on your virtual journey. We have identified three types of websites that Google and Yahoo link to when searching for employee leasing or professional employer organizations. The first type of website that visitors will encounter are “Provider” sites, next are “Leads” sites, and last but not least, websites of PEO “Brokers” or consultants.

Is your company among the thousands who are looking for affordable health insurance coverage? You probably have read that professional employer organizations can save business owners 20% to 30% on their health insurance premiums because of their large group health plan. While this claim may be slightly exaggerated, the fact is that less then 10% of all professional employer organizations actually have a master group health plan.

Door # 1 – Are You A PEO Provider?

So how do you know if the website you visit belongs to a true employee leasing or professional employer organization? Look for logos of national and local industry associations like NAPEO, ESAC, FAPEO and others. At the same time, logos from payroll or staffing associations may mean the company is not focused on providing comprehensive human resource services or the “Fortune 500” benefits plans you want.

The “About Us” section should identify the management, their background and expertise. Are you looking for a company that offers a true “master” group health plan? Click on the employee or benefits section to see what types of employee benefits programs are available. Don’t be fooled by insurance company logos. Linking to the websites of Aetna, Blue Cross, or any of the national or regional health plans networks, does not indicate that a company has a large group health plan to offer.

Many PEO’s claim to save you money because of their “large group purchasing power”. In reality, all you get is their insurance broker shopping the market. You may be better of with your own broker. It is important to read between the lines. Here are a few examples.

We offer customized, tailored benefits programs, suited to meet each of our clients’ needs, objectives, demands, and budget. We negotiate contract renewals or we handle receipt of carrier billing and payments.

Be prepared to ask tough questions when you contact the PEO or employee leasing company. Ask about renewals and underwriting. Remember that you will be speaking with someone who represents only that company, and it’s their job to “close the sale”.

Door # 2 – You’re Leading Me On?

Next stop on our virtual tour are the nefarious “Leads” websites. Many of these websites are very attractive, easy to navigate and usually feature information taken directly from websites of established companies (without their knowledge). A typical example is the website SmallBusinessExpo.com. Notice the last sentence at the bottom of the page.

Are you Gevity? Call to customize this page at no charge. Contact us by phone or email.

Google links to obvious “Leads” websites like BuyerZone.com and Staffmarket.com. It is relatively easy to see that these sites collect your company information and sell it to the highest bidders. Many “Leads” websites provide visitors pages of information on topics relevant to employee leasing such as payroll processing and workers compensation. Often the articles are written offshore or copied from legitimate HR blogs and websites.

Websites carrying ads from Google is another clear sign to move on. Why would any employee leasing, PEO or HR company want a competitor advertising on their website. Beware of companies who consistently rank first or second place in Google or Yahoo. In a recent search of Google for employee leasing, first position linked to wiseGeek.com. wiseGeek is owned and operated by Conjecture Corporation of Sparks, Nevada who “creates and manages a portfolio of informational and entertaining consumer web sites”.

Door # 3 – PEO Broker, Who’s Side Are You On?

Our last stop takes us to websites of “Brokers” or consultants specializing in employee leasing, HR outsourcing and the professional employer industry. You will find there are exceptional professionals across the country, many have years of industry experience, with backgrounds in accounting, banking, and insurance. But, how will you know if you have found a qualified consulting firm or PEO brokerage that will help you find and negotiate for a suitable provider? My best advice comes from President Ronald Reagan, who when dealing with the USSR on nuclear disarmament said; “trust but verify”.

“Brokers” websites typically offer business owners and executives a choice of leasing firms and PEOs to select from. Some consultants specialize in a particular region of the country, or have experience with certain industries. The demands and requirements of a client in the trucking business is not the same as an IT company. An industry professional will know exactly which PEOs to contact for a proposal. Ask the firm for their years in business, background, industry experience and expertise, and how they are compensated?

Website testimonials may indicate client satisfaction, but it is always a good idea to ask for, and follow-up on references from both their clients, and the companies they work with. LinkedIn members can access groups dedicated to the PEO industry where you can ask industry professionals about a particular broker or consultant’s reputation. Buyer beware is the rule of the day when shopping for payroll, HR outsourcing and professional employer services.

Tell us if we removed some of the bumps on your road to finding the right employee leasing company or professional employer organization for your business.

Sexual Harassment in the Workplace: Don't Take it by Heather Huhman

2008-11-23T10:11:00.005-05:00

By Bruce Silver, Founder

Employers Rx LLC

An excellent article written by Heather Huhman in the Carreers and workplace section of theTampa Bay Examiner.com. Her article covers several aspects of the number 1 problem in today's workplace - Sexual Harassment. She provides common examples of actions that are considered sexual harassment. And describes why some behaviors, while crude and repulsive, often are not.

Heather Huhman has been a mentor to individuals seeking entry-level positions, particularly in the public relations field, for many years. She has "been there, done that" when it comes to young careers. Heather may be contacted at entrylevelexaminer@gmail.com.

As someone who has been sexually harassed in two different workplaces in my past, I feel it is important to outline what is and is not appropriate and provide the best course of action if you feel it is happening to you.

The U.S. Equal Employment Opportunity Commission (EEOC) defines sexual harassment as “unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature…when submission to or rejection of this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance or creates an intimidating, hostile or offensive work environment.”

Approximately 12,500 charges of sexual harassment were brought to the EEOC in Fiscal Year 2007, 16 percent of which were filed by males. Yes, males can be sexually harassed, too. These numbers are likely well beneath actual occurrences because, like most charges of a sexual nature, many incidences go unreported.

Examples of Sexual Harassment

1. Quid pro quo. “The boss says, ‘sleep with me and you'll get a raise’ or ‘if you don't sleep with me you'll get fired,’” said Scott I. Barer, a labor and employment law attorney at the Law Offices of Scott I. Barer.

2. Hostile work environment. “For example, a workplace that regularly plays a radio program featuring frequent vulgar references to sexual activities, sex acts and body parts can be a hostile environment,” said Andrew Milne, a senior counsel with Garson Claxton LLC. “In April of this year, a woman successfully sued her employer based on her daily exposure to such a radio show, despite her repeated requests that the program not be played in her workplace. The court concluded that the offensive comments were unwanted, sexual in nature and offensive to women generally, and the daily broadcast of the show in her workplace made the offensive conduct pervasive enough to be sexual harassment.”

There are many other examples of a hostile work environment. For example, says Roberta Chinsky Matuson, president of Human Resource Solutions, telling unwelcomed jokes of a sexual nature. “If the other person finds the joke offensive, and it makes the work environment uncomfortable, then this would be considered creating a hostile work environment.”

Examples of Behavior Often Mistaken for Sexual Harassment

1. Consensual dating, joking and touching. “Only unwelcome conduct can be sexual harassment,” said Matuson. “However, it should be noted that often times things start out one way and end up another. For example, you may decide it is okay if you date your boss and he or she touches you at work. If the relationship should end, you may no longer feel it is okay for this behavior to continue. If you ask the person to stop, and they continue to do so, then you are being sexually harassed. Of course it is more difficult to prove this if you have already had a consensual relationship. That is why it is advisable to resist the temptation of dating your boss.”

2. “You look nice today.” “The boss says to his assistant, ‘You look nice today. That's a great outfit.’ There, he has not acted unreasonably by complimenting his assistant. But, the boss should not take it to an extreme and say something like, ‘That's a great outfit. It really makes your legs look sexy.’ Also, the boss should not compliment the employee so often so as to make her feel uncomfortable. But, an occasional compliment would be permitted, and maybe even welcomed by his assistant,” said Barer. “If the boss makes even a single, innocuous compliment, and the employee asks him to stop, he should do as requested.”

3. Open criticism. “For example, if a male supervisor yells at a female subordinate in front of other people in the office for poor performance, and the female employee gets embarrassed, that is not harassment,” said Beth Hinsdale, a partner with Fox Rothschild in the labor and employment practice group.

4. Crude language. “Swearing in the workplace is not harassment,” said Anne Caldwell, president of Outsourcing Solutions.

5. Isolated or infrequent vulgar acts. “Isolated comments and infrequent touching, even if unwanted, may not be unlawful sexual harassment,” said Milne. “In one recent case, the court decided sixteen instances of offensive conduct in four years was not severe or pervasive. It did not matter that the offensive conduct included several instances of unwanted touching and three unwanted attempts to kiss the victim. Should such conduct be reported to an employer? Absolutely, and the employer should take steps to stop it. But, hostile environment lawsuits are not easy, and not all offensive sexual conduct is going to result in successful court case for the victim.”

“Another example is someone asking you out, and you saying no. If it happens once, it is not harassment,” said Erica Pinsky, CHRP, B.A., M.Sc., CertConRes, principal consultant at Erica Pinsky Inc. “Or, if someone compliments you once, it is not sexual harassment. This is because, again, we usually are looking for a pattern of behavior that has consequences for the person at work.”

6. Asked to work late…in exchange for dinner. “Suppose a male supervisor asked a female employee to work late, and he told her that he would buy her dinner for her trouble. That is not sexual harassment,” said B. Allison Borkenheim, an attorney at Procopio, Cory, Hargreaves & Savitch LLP. “He has not requested sexual favors and conditioned the terms of her employment or employment opportunities on sexual favors. He simply offered to feed her as a thank you for her hard work.”

Action Steps

Don’t allow a supervisor or coworker sexually harass you – period. As I previously stated, I have been the victim of sexual harassment in two different workplaces. In one instance, I had to go to step six listed below in order to resolve the problem. In the other situation, I actually had to leave the organization because not enough was being done. Sexual harassment is typically about power. Don’t let these individuals have power over you.

1. Confront the offender. “Interns and entry-level employees, like all employees, should first try to resolve the matter directly with the offender,” saidLily M. Garcia, Esq., SPHR, a human resource professional and employment discrimination attorney.

2. Identify your allies. What if confrontation makes you extremely uncomfortable or you fear your job is at risk if you confront the offender?

“This is certainly a valid concern, and where HR or a sympathetic manager can help. Many members of management are sensitive to sexual harassment issues, and will take any such complaints very seriously. The employee should actively seek out a senior level member of the company – even if not in his or her department – and air the issues,” said Josh King, vice president of business development and general counsel for Avvo, Inc.

3. Put it in writing. “Keep a log of situations where you have felt harassed. Be sure to note time and dates along with your response to this behavior,” said Matuson.

4. Consult the organization’s sexual harassment policy. “Most policies provide for multiple avenues of recourse, including your immediate supervisor, senior members of management, the human resources department, and anonymous complaint hotlines,” said Garcia.

Milne adds, “If there is no written sexual harassment policy, then the company’s human resources department is the group most likely to understand the legal requirements in this area. An employee usually should involve his or her immediate supervisor in resolving sexual harassment, unless the supervisor is the source of the harassment, an active contributor to the ‘hostile environment’ or has clearly expressed or implied hostility toward sexual harassment claims.”

5. File a complaint. “Employees should use the complaint procedure offered by their employer's policies. If they do not, the employer will often have a defense to harassment complaints,” said Hinsdale.

6. Look for consultation outside the organization. “If an employer does not have an effective sexual harassment policy, or doesn’t actually follow their written policy or investigate allegations of sexual harassment, employees can seek guidance from the local offices of the EEOC, state agencies that handle employment discrimination matters and private attorneys,” said Milne.

Disappointed by your PEO or Employee Leasing Company?

2008-11-18T14:56:00.004-05:00

By Bruce Silver, Founder
Employers Rx LLC

Have you been disappointed by an employee leasing company or professional employer organization? Was your PEO hired to help you with your employee administration, benefits and compliance tasks. Let's face it. Most PEO's claim to be comprehensive HR organizations who help small business save time and money.

Sometimes this isn't always the case.

Blogger Jonathan Kamens on his blog entitled Something Better To Do describes his experience as an employee of Advent Software, a small software company specializing in financial management systems.

Administaff disappoints

A little less than a year ago, my employer, Tamale Software (since acquired by Advent Software, in what I would happily classify as the fourth successful acquisition of the five in which I’ve been involved), decided to outsource its human resources function to the Professional Employer Organization (PEO) Administaff.

Administaff uses a “co-employment” model, wherein the employees of Administaff’s clients become employees of Administaff as well, and Administaff handles health insurance, payroll, recruiting, performance management, etc. Administaff clients don’t necessarily use all of Administaff’s services; it’s a menu from which they choose what they want. The biggest reason for a company to use Administaff is probably to reduce the cost of health insurance. Administaff can bargain with the insurance industry for lower rates than a small or medium-sized business can on its own, since they have a far larger employee pool.

Tamale has always had awesome benefits, including great health insurance with 100% of the premiums paid by the company. But the company and its employees got a little older and more mature (read “got married and/or started having babies;” I must confess that I’m a major contributor to this!), and at the same time the cost of health insurance skyrocketed across the board. It’s therefore not surprising that Tamale went looking for a way to reduce its costs, and perhaps switching to Administaff was a necessary evil.

Nonetheless, from the point of view of the employees, it was not a positive change. We went from having all of our HR needs seen to directly by an extremely competent, friendly Tamale employee in our office, to dealing over the phone or internet with nameless, faceless Administaff employees cut out of the “barely adequate customer service representative” mold.

Of course, the Administaff sales people sang the praises of their service team and spoke glowingly about how painless the transition would be. I’m sure it will come as no surprise that the reality did not live up to the hype. There were problems from the start, and the problems continued throughout our time with Administaff. A few examples:

When we filled out the HMO enrolment paperwork, we were given the option of specifying primary care physicians (PCPs) on the forms and told that they would be entered into the system with our initial enrolment. Many of us took the time to look up PCP ID numbers and include them on the form. Administaff did not bother to enter anyone’s PCPs into the system.
When our HR manager contacted Administaff about the fact that they had completely ignored everyone’s PCP designations, rather than immediately admitting the error and agreeing to rectify it, they told her that we would all have to call the insurance company directly to take care of it. Needless to say, she pushed back until they agreed to solve the problem.
With their commuter pass program, it was impossible to know from one month to the next which paycheck the cost of the pass would be deducted from. Some months it was the first paycheck, some months it was the second, and some months they completely forgot and had to deduct from both paychecks in the following month.
They charge a $2 fee per month for the commuter pass program. No employer I have ever worked for in my entire life has charged a fee for participating in a commuter program.
One month they simply failed to process the commuter passes on time, and we didn’t get them until after the beginning of the next month. We received a letter notifying us that our passes were going to be late and instructing us to buy “day passes” for the intervening days (what about people who live out in yachupitzville where nobody sells T passes?) and then to send in a form to be reimbursed for them. Wow, what a great time-saver!
It sometimes took Administaff as long as a week and a half to deposit 401k money withheld from paychecks into people’s 401k accounts. Yes, that means that Administaff was making money off of the float in the interim.
When we terminated our relationship with Administaff after the acquisition, I applied to have my Health-care Flexible Spending Account (FSA) continue under COBRA, because there was a lot of money remaining in the account and I needed more time to spend it. Two weeks after sending the premium check to Administaff to continue the FSA coverage, the check still hadn’t been cashed and the FSA provider still had my account marked closed and therefore was refusing to accept new claims.

Everybody makes mistakes, and occasional mistakes can and should be forgiven. But when there’s a pattern of mistakes, as in the odd-numbered items above, that a sign not only of a lack of quality, but of not caring about quality. And as for the even-numbered items above, they represent much more than simple mistakes; they represent conscious decisions that are detrimental to the customer.

I did a little research about Administaff and discovered that in addition to the “little” problems (not so little, really!) described above, they’ve had their share of Big Problems as well:

In October 2007, an Administaff laptop containing unecrypted personal data on 159,000 current and former employees managed by Administaff was stolen. Adam Breindel has a great takeon just what this incident says about Administaff (and it isn’t good).
Back in 2003, Administaff attempted to intimidate people out of saying negative things on their Yahoo! Finance message board by suing Yahoo! and demanding that they reveal the identities of the people making the comments. More information at The Center for Internet and Society at Stanford.

I understand that small and medium-sized businesses face incredible pressure to lower costs any way they can, and for some of them, going with a PEO like Administaff might be inevitable. But I urge any business considering such a move to evaluate carefully the impact on employee morale and the time employees will waste dealing problems like the ones described above, and I urge such businesses to evaluate not merely cost, but also quality of service when choosing which PEO to utilize.

Common Mistakes Made Shopping for PEOs and Employee Leasing on the Web

2008-11-17T09:35:00.010-05:00

By Bruce Silver, Founder

Employers Rx LLC

Second of a three part series

Never Judge a Book by it's Cover

Search Google or Yahoo using the keywords employee leasing or professional employer organization and you will find hundreds of websites offering all variations of employee leasing, HR Outsourcing and PEO services. Many are legitimate websites for companies that actually provide employee leasing and HR services. These sites belong to "Providers", companies that are Professional Employer Organizations like ADP and Oasis Outsourcing.

Another type of website offers “quoting” services that will allow you to receive quotes from multiple companies. Very often these websites are designed to do nothing more than capture leads. These "Lead Generation" sites don’t offer professional services or expertise, but are simply taking your contact information and selling it. Often your company profile is stored in a database, and sold to 10 or more sales organizations that are foolish or desperate enough to pay $25 - $50 for your “lead”.

Still other websites offer employee leasing and PEO consulting services from professionals who will analyze your needs, introduce you to suitable partners, and assist you with the proposal and implementation process. As in any industry, it is sometimes difficult to tell who truly has the expertise and integrity worthy of your business.

The most important website for information about the industry is www.napeo.org, the National Association of Professional Employer Organizations. There you can learn about the co-employer concept, the history of the industry, statistics, and a list of member employee leasing companies, PEOs, as well as PEO brokers and consultants. The primary function of NAPEO is to promote the industry to business owners and government officials. Members pay NAPEO annual association dues based on their size to support these efforts.

Unfortunately, Google and Yahoo often list the NAPEO website on the second page. Usually people will click on the first few "paid" inclusions found at the top and side of the search page. These ads are sold to the highest bidder and it may indicate an organization that is more interested in putting their money into marketing, instead of delivering affordable quality service.

Look for part three:

What is Behind Door Number 1, 2, or 3?

Common Mistakes Made Shopping for PEOs and Employee Leasing on the Web

2008-11-15T08:06:00.008-05:00

By Bruce Silver, Founder

Employers Rx LLC

First of a three part series.

Web Shopping for Employee Leasing and PEOs can be Tricky.

Where can a Busy Executive Turn to for Help?

Your a small business owner who is trying reduce costs because of the slowing economy. Your insurance broker just delivered your annual renewal rates. Workers compensation coverage increased another 20% because of a large claim you experieced 2 years ago. Your small group health insurance went up another 25%, and the only recommendation your broker has ...... reduce the benefits again, and ask your employees to pay even more for less coverage.

Faced with this dilemma, many successful business owners will seek out solutions offered by an employee leasing company or PEO professional employer organization. Unfortunately, many executives have little experience shopping for employee leasing and HR outsourcing services. Some will ask an associate or their accountant for a recommendation, and others may let their fingers do the walking through the "Yellow Pages".

Today, more and more busy executives are turning to the Internet for help.

Look for the part two:

Never Judge a Book by it's Cover

7 Signs That Your Company May Be Ready for HR Outsourcing

2008-10-24T08:58:00.010-04:00

A Note From the Editor
By Bruce Silver

HR World continues to be a valuable source of "Real World" information for busy executives, business owners and HR managers. John Edwards points out the signals that successful enterprises, large and small, should pay attention to.

We know that many readers of this blog operate small and mid-sized companies who do not have HR departments. That doesn't mean that your HR functions aren't being performed. Unfortunately, many firms lack employees well "versed" in employment rules and regulations.

John's article takes you on an enlightening tour from the boardroom to the mailroom . When will you know it's time to consider outsourcing your organization's HR administration and compliance functions? See how HR practices can effect the success of your business.

By John Edwards

There comes a time in the life of most successful businesses when a decision has to be made as to whether certain HR tasks are best handled in-house or by an HRO (human resources outsourcer). Making the right call at the right time isn't easy, but certain telltale signs can indicate when it's time to "pull the trigger" and call for help. This is what you should look for:

Spiraling Costs: Rapidly rising costs in payroll, benefit management and other key areas continue to be the primary driver for HR outsourcing. While cost reduction isn't the only reason for using an HRO — efficiency, quality and speed are other motivating factors — it's certainly a major consideration.

Missed Deadlines: If a growing number of employees are complaining that critical documents, ranging from paychecks to W-2 forms, are arriving late, it's a sign that something is broken. There's a good chance that the delays are being caused by an HR department that's stretched beyond its capabilities. An HRO can step in and help get critical work back on schedule without the need to hire new HR employees or upgrade facilities.

System Overloads: If HR tasks are beginning to overwhelm internal IT resources, it’s time to either invest in additional technology or turn at least some of the crippling workload over to a third party. HROs rely on their own IT systems, enabling in-house systems to focus on non-HR-related tasks. A cost/benefit analysis may show that it would be cheaper for your business to shift data-intensive and high-priority HR resources, such as employee databases and Web self-service operation, to an HRO rather than invest in new on-site technology.

Increasing Mistakes: No HR department is foolproof, but snowballing goofs are another sure sign that people and systems are being stretched beyond their limits. Assigning mistake-prone work to an HRO can lower the pressure on in-house staffers. The best part is that an HRO can be held accountable for supplying a basic level of accuracy in whatever work it handles. This is especially important in situations such as payroll where legal compliance is an issue.

Poor Quality Work: Mediocre or worse output over an extended period of time is a sign that an HR department is being overworked or — more ominously — simply isn't competent. While a business may wish to experiment with new managers and work procedures, it may be simpler to just outsource everything to a third party, either permanently or while a new HR department is being assembled.

Disgruntled HR Workers: Employee griping is as common as office football pools. But when the complaining begins drowning out normal discourse, it's time to start considering remedial action. An HRO can step in during busy seasons to take on the extra time-consuming tasks that drive up HR workloads and staff discontentment.

Competitors' Moves: Are many of your business' prime competitors shifting to HROs? If so, they might have spotted a need that you may not have yet detected or have been unwilling to acknowledge. Ask around and find out what benefits your rivals are gaining from outsourcing HR work. You may discover that these same issues apply to your organization.

Employers Rx Founder Bruce Silver is Featured on the South Florida Business Report

2008-10-17T07:49:00.009-04:00

West Palm Beach, FL, October 17, 2008 -PR.com --- Bruce Silver, founder of employee management consulting firm Employers Rx LLC will be featured on this week’s edition of “The South Florida Business Report” airing on WPEC-CBS Channel 12. Bruce is interviewed by veteran television producer David Weir, who delves into the reasons for his founding of Employers Rx LLC, and the variety of areas that South Florida business owners and entrepreneurs can reduce costs in these challenging times.

The interview touches on the most troubling areas for companies operating in South Florida, and across the country. How can I provide affordable health care for my employees? How can I reduce my administrative costs? How do I stay ahead of HR compliance and employment regulations? Answers to these and other challenging problems are discussed. Bruce explains what a Professional Employer Organization (PEO) is, and the concept referred to as the co-employer relationship.

The South Florida Business Report is devoted exclusively to the local business community, delivering all the local business news, from the lemonade stand to the boardroom. The show, now in its 23rd year, has produced over 20,000 local business stories and nearly 2,500 interviews with local business people. Guests on the show have included Senator Phil Gramm, Senator Connie Mack, and Steve Forbes.

Join David Weir and PEO industry expert Bruce Silver to learn how a Professional Employer Organization can help small and midsize companies weather the storm and prepare for brighter days. The show is broadcast to over 775,000 homes on WPEC-CBS12. Viewers from Ft. Lauderdale to the Space Coast and west to counties surrounding Lake Okeechobee can watch the telecast on Saturday October 18th at 12:00 noon. The show will be rebroadcast Sunday morning at 5:30am on October 19th.

Additional information is available at http://employers-Rx.com, or contact Bruce Silver by email at bruce@employers-Rx.com or by telephone at (877) PEO-CURE.

Information about David Weir and the South Florida Business Report is available at: http://www.southfloridabusinessreport.com

Social Security Announces 5.8 Percent Benefit Increase for 2009

2008-10-16T08:59:00.004-04:00

Monthly Social Security and Supplemental Security Income benefits for more than 55 million Americans will increase 5.8 percent in 2009, the Social Security Administration announced today. The 5.8 percent increase is the largest since 1982.

Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year. This year's increase in the CPI-W was 5.8 percent.

The 5.8 percent Cost-of-Living Adjustment (COLA) will begin with benefits that over 50 million Social Security beneficiaries receive in January 2009. Increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on December 31.

Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $106,800 from $102,000. Of the estimated 164 million workers who will pay Social Security taxes in 2009, about 11 million will pay higher taxes as a result of the increase in the taxable maximum.

http://www.ssa.gov/pressoffice/pr/2009cola-pr.htm

Offsite HR versus Professional Employer Organization

2008-09-29T08:16:00.008-04:00

Published by Bruce Silver
Employers Rx LLC
September 29, 2008

Many business owners have asked me to explain the difference between an Off-Site Human Resource Organization (HRO) and a Professional Employer Organization (PEO), also referred to as employee leasing companies. While most of my clients could care less what the solution is called, so long as we resolve their problem, there are clear differences between these two classifications.

When considering whether you should select an HR outsourcing provider or contracting with a Professional Employer Organization, it is extremely important for business owners and managers to identify the weak links with their employee management and human resource administration. Ask yourself, how can we make our company more competitive? What areas of employee administration can be delivered more efficiently? Are your human resource policies and procedures up-to-date. Are you protecting yourself from frivolous lawsuits by adhering to the myriad of federal, state, and local employment rules and regulations? Are you attracting the best employees by providing a competitive benefits program at affordable rates?

There are four key areas to examine when comparing which employee management solution is best suited for your small or mid-size company. The first area looks into the vendor relationship by examining the roles and the responsibilities of each party under each contract. The second area explores the different services you can expect to receive from each solution provider. Next, we will delve into the various service models, and the different ways that services are delivered, their flexibility, and ways it "touches" your management and employees. Finally, we examine market availability, suitability, and a range of costs or savings you could expect.

We will focus in on each of these four areas in detail with a series of posts to follow. The series will offer our insights on an HR Outsourcing industry that often uses confusing and contradictory definitions and terms to describe similar services. Return often to learn about industry leaders, what sets them apart, and why. We will identify the types and levels of professional services that are best suited for your company's size and budget.

We hope you will join us.

More information is available at Employers-Rx.com

Employers Rx Founder Bruce Silver is Featured PEO Expert for HR World Webinar

2008-09-15T10:22:00.009-04:00

Bruce Silver, founder of employee management consulting firm Employers Rx LLC will be the featured guest speaker for a webinar presented by HR World.com on September 25th, 2008. Entitled “7 Ways to Effectively Run a Growing Company in a Slowing Economy” the webinar will focus on ways that small and midsize companies can survive the current economic downturn and prepare for the coming recovery. This informative webinar will look into specific areas where a Professional Employer Organization or PEO can help business owners and entrepreneurs to reduce costs and maximize their human capital investments.

Visitors joining the webinar will learn the top 7 ways to "take the headache" out of effectively running a growing company using a complete Professional Employer Organization (PEO) solution, including:

Payroll Processing
Health & Welfare Benefits Administration
Workers compensation coverage
Mitigating & Reducing Compliance Risk
Outsourcing HR Administration - The Pros & Cons
Improvements you can make to stabilize & control costs
Plus much more...

Joining Bruce on the webinar will be HR World Editor and Senior Editorial Director Owen Linderholm and Doug Leonard, Vice President of Marketing for Gevity HR, one of the nation’s leading HR Outsourcing companies who is sponsoring this event.

HR World is a leading resource for HR professionals. The site provides in-depth content that HR professionals at small, medium and large companies need to make key decisions. The site provides original content covering news, events and information relevant to HR professionals. HR World is a trusted source for human resource managers and buyers.

Join industry experts to see how a PEO can enable you and your company to focus on saving costs while boosting employee performance and satisfaction. Employers Rx is proud to be a part of this informative and timely subject. The webinar will enlighten HR managers and decision makers to the many ways that partnering with a Professional Employer Organization can help their small and midsize company weather the storm and prepare for brighter days. Attendees can register at the Employers Rx website by clicking on the link at http://employers-rx.com/solutions.php.

Aon Puts a Favorable Spin on Health Insurance Increases

2008-08-20T14:00:00.011-04:00

Aon Corporation, the world's 2nd largest insurance broker released their latest survey on projected "health care" costs for 2009. An increase of only 10.6%. So what would you expect the headline to be.

HEALTH INSURANCE RATES GOING UP AGAIN.

Well not exactly. How about ....

HEALTH CARE COSTS TREND DOWN

Don't be fooled by the industry "Spin". Small business owners and mid-size companies should be prepared to experience another round of double digit rate increases again this year. Just like your experience last year, and the year before that, and the year before that.

Aon Consulting's U.S. Health & Benefits practice director, John Zern, said of the survey results: "While the medical trend rate is still more than twice the consumer price index, it is encouraging to see that health care cost rate increases are continuing to slow down. This is a step in the right direction for companies nationwide that continue to feel significant health care price pressures."

Bill Sharon, senior VP of Aon Consulting and director of the study attributes the decrease in the medical trend rate to more employers and employees taking advantage of wellness, health promotion and consumer driven programs.

"Unlike some other healthcare trend surveys, Aon Consulting's survey reports the expected future increase in employer-provided health plan claims cost before any plan changes, based on the opinions of health plan actuaries. We provide this trend data to help employers evaluate the competitiveness of health insurance premium renewals. For employers with self-funded health plans, this trend data helps them (and their actuaries) develop future claim estimates for budgeting purposes."

This is "double speak" for let us see where we can cut your benefits this year. Once again, the insurance company will pay less of the claim (if any), employees will pay more, and the employer still gets socked for an increase in premiums, only not as much as last year. Sound familiar?

If your a business owner, employer or manager and you want to escape the annual treadmill or health insurance rate increases .... than you should consider the services of a Professional Employer Organization

PEO-quote.com offers a free guide that helps entrepreneurs and busy executives find out about the many solutions that employee leasing, HR outsourcing, and professional employer organizations can provide the small and midsize company. Take the time to learn what some of the industry leaders can do for you. You owe it to yourself, and to your employees.

Too busy, then call on the services of a consultant that specializes in employee leasing, and the HRO and PEO industry. Business owners can have their questions about employee leasing and professional organizations answered by experienced professionals at Employers Rx LLC.

Employee Leasing Scams

2008-05-30T07:59:00.019-04:00

Employee Leasing Scams - Buyer Beware.

This article highlights what can go wrong when signing up your small or midsize business with an employee leasing company or professional employer organization without doing your homework. The damage done (and potential liability) by not performing the proper due diligence can have a devastating effect

After almost 6 years, prosecutors are finally bringing to justice (after appeals) 3 more individuals whose audacity and greed ruined the lives of business owners and their employees in Florida, New Jersey, New York and the Midwest.

The Florida Times-Union
By Paul Pinkham

Judge sentences business men to prison

Three business owners who cheated millions of U.S. workers out of insurance benefits were sentenced to a total of 55 years in prison by a Jacksonville judge Thursday in what one investigator called Florida's biggest insurance fraud case. U.S. District Judge Virginia Hernandez Covington also ordered the men to forfeit $75 million in assets to the government to partially repay their victims. She said she was "repulsed" by the crimes and hopes the sentences send a message to the business community that fraud won't be tolerated.

Greed got the better of you," Covington told the defendants, all in their 50s.

In February, after a five-week trial, jurors convicted Donald Edward Touchet, Richard E. Standridge and Robert J. Jennings of mail fraud, wire fraud and money laundering. Prosecutors said the men used sham insurance companies to defraud tens of thousands of small business owners into paying premiums for nonexistent workers comp coverage. Five of the victimized businesses were in Jacksonville. As a result, millions of workers were left without insurance, and some suffered catastrophic financial setbacks, said Assistant U.S. Attorney Mark Devereaux. They included a Missouri man who lost both legs in a construction accident and was only able to get one replaced because the insurance, which he thought he had, never paid for the first one. Another victim, a Lake Butler trucker, suffered brain damage from a job accident but got no salary or hospitalization benefits. He lost his home and his marriage, according to trial testimony.

Covington sentenced Touchet, 54, of El Cajon, Calif., to 22 years in prison and ordered him to forfeit $35 million and property in San Diego County, Calif., to the government. Standridge, 59, a Tempe, Ariz., physician, was sentenced to 18 years in prison and ordered to forfeit $19 million, a $400,000 bank account and four vehicles. Jennings, 59, of Danville, Ill., was sentenced to 15 years and ordered to forfeit $21 million, property in Danville and a motor vehicle. He is dying of cancer, his lawyer said.

Fourteen people have been convicted in the insurance scam, which FBI Special Agent Doug Mathews called the biggest ever in Florida. A 15th defendant is at large in England, and another died while under investigation. Devereaux said prosecutors are proceeding with forfeiture against his New Jersey employee leasing company. The national FBI investigation spun out of the Jacksonville prosecution of Thomas King, president of the Jacksonville employee leasing firm Miralink Group, which collapsed in 2002. King is serving a 14-year sentence. Touchet owned a California employee leasing firm, Jennings ran an administrative services company and Standridge operated several medical corporations. They provided the administrative functions of the sham insurance that King and others purchased, Devereaux said.

In court Thursday, the three men claimed to have been victims themselves, but Covington didn't buy it. "I don't think this had to do with being naive," she said. "I think this had to do with being greedy." Although all three said they sympathized with the victims, Devereaux said their actions and testimony at trial show differently. "You don't get any more serious of a white-collar crime," he told Covington. "This is almost like an Enron where people's life savings are gone, and they [the defendants] just don't care. ... The amount of loss here is absolutely tremendous."

The defendants plan to appeal.

Legislators Mull Professional Employer Organizations

2008-05-19T07:22:00.006-04:00

Regulating employee leasing companies and professional employer organizations can be a formidable task. Elected officials of West Virginia's Government Organization Subcommittee C is learning just how difficult it can be. Mannix Porterfield, a reporter with the Register-Herald, provides us with an insight into examining the operations of these companies.

This article makes a strong case why business owners and executives should seek professional advice when considering the selection of an Employee Leasing, HR Outsourcing, or Professional Employer Organization for their company.

Legislators Mull Professional Employer Organizations

By Mannix Porterfield
Register - Herald

An emergency rule is coming in mid-June to govern how Professional Employer Organizations align with workers’ compensation coverage, but other issues affecting them don’t end there. In fact, based on Sunday’s discussion by Government Organization Subcommittee C, lawmakers had best plan on looking at PEOs during interims for the rest of the year. Taxes, labor laws and unemployment compensation are all matters the panel plans to look at, Sen. Evan Jenkins, D-Cabell, a co-chairman, assured members. Until last year, there was no regulation of the growing business, and it was the PEO industry itself that called on lawmakers for some standards.

“They are worried, in part, about the image an unscrupulous entity that would act like a PEO but not really be a PEO, and come in and spoil what an appropriately formed and structured PEO may do,” Jenkins said. Insurance Commissioner Jane Cline told the panel her office intends to file an emergency workers’ compensation rule governing PEOs with the secretary of state’s office next month. “The issue of health insurance coverage seems to be a big concern,” Cline said. Cline recalled “a disastrous situation” that occurred with a PEO in North Carolina when the company slipped into bankruptcy, leaving a number of employees in the lurch.

About 14 states have some type of legislation on the books similar to West Virginia’s new law. “Are there places that have a track record of PEOs that we could somehow follow and not have to re-invent the wheel?” asked Sen. Ron Stollings, D-Boone, a doctor. Cline said the industry is interested in the Legislature providing some levels of regulation. “There are legitimate ones doing legitimate things out there,” the insurance commissioner said. “They’re concerned about the ones who might be doing it in a rogue manner.” Committee counsel Brenda Thompson said legislation “varies so greatly” in states that have enacted such legislation, “and it’s really a new creature.”

A lawsuit in Nevada over a PEO law has traveled through four courts already and remains unsettled after eight years of litigation, she pointed out. “This is pretty heavy stuff we’re going into,” Stollings said. “I wish someone had plowed a furrow for us to follow.”

PEOs function as a go-between for a business and its employees, such as in the operation of a firm offering temporary secretarial help, Jenkins explained afterward. “So that company writes one check to the PEO, who would cover all aspects of the employees,” the senator said. “It’s almost like having a dual employer situation. The PEO promotes itself as relieving that employer of the many traditional employer-employee management responsibilities.” A company may retain its right to discipline and fire its workers, but the PEO is the actual entity writing the checks, paying taxes on wages and covering the benefits, he said.

“As we studied this last year, we kept peeling back layers of what these PEOs did,” Jenkins said. “We realized it’s a very complex system.” Last year’s measure merely requires PEOs to register with Cline’s office to lay the groundwork for getting workers’ compensation coverage. “We were wanting to make sure employers weren’t dodging their workers’ compensation responsibilities by using a PEO, and a worker, if injured on the job, wouldn’t find himself in a Catch-22,” Jenkins said.

The Risk of Using Independent Contractors

2008-05-16T08:29:00.002-04:00

The authors highlight some of the recent changes which may effect companies who employ independent contractors. State and federal regulators and legislators have taken steps to address the widely used, (and often abused) practice of misclassifying entire classes of employees as independent contractors. The report reveals why large and small employers alike should take care in assigning independent contractor status to individuals engaged in consulting, delivery and transportation, sales and marketing, management, personal and technical services.

Compliance and the fear of litigation is just one of the reasons that so many employers are seeking the services of third party employee management firms. Many service models exist, from payrolling companies - providers who serve contingent workforces, employee leasing companies, and PEO's - Professional Employer Organizations.

Below are excerpts from a recent article in the New York Law Journal.
http://www.nylj.com

By Richard J. Reibstein, John A. Nixon, Dan A. Schulder, Stuart A. Shorenstein and Tiffany Raspberry.

The legal landscape involving independent contractors has dramatically and swiftly changed. For decades, legal challenges to an employer's use of independent contractors were infrequent, and many companies were willing to risk the remote chance that they would have to defend a lawsuit or a regulatory inquiry that they had misclassified certain employees as independent contractors.

Over the last year, however, there has been a wave of regulatory and legislative initiatives at both the federal and state levels seeking to stem the use of independent contractors. In addition, companies have been faced with substantial judgments in highly visible lawsuits brought on behalf of classes of workers who have successfully established that they were common law employees improperly classified by their employers as independent contractors.

Regulatory Initiatives

Within the past year, there have been a number of initiatives regulating the use of independent contractors. In May 2007, the Internal Revenue Service undertook a worker misclassification program and announced that the misuse of independent contractors would be a major area of emphasis for the IRS in fiscal 2008. By Nov. 6, 2007, the IRS had entered into data-sharing agreements with 29 state workforce agencies to share the results of employment tax examinations. The IRS has also started to focus in earnest on large corporate employers that allegedly have misclassified employees as independent contractors. In December 2007, the IRS assessed FedEx Ground for $319 million in unpaid employment taxes and penalties, just for calendar year 2002, following the IRS's determination that FedEx Ground drivers had been misclassified as independent contractors.

The Risks of Misclassification

Some of the most substantial risks faced by employers that are found to have improperly reported the income of employees as independent contractors are liability for unpaid federal, state and local income tax withholdings and liability over Social Security and Medicare contributions that are not paid on a Form 1099. Other large financial risks include unpaid unemployment insurance premiums, unpaid Workers' Compensation premiums and unpaid overtime compensation and work-related expenses. These types of liabilities (plus interest and penalties for non-payment) can be potentially devastating for employers that make considerable use of independent contractors.

Another substantial risk is a claim of benefit entitlement by or on behalf of common law employees misclassified as independent contractors. Claims have been successfully brought for pension and profit-sharing benefits, medical benefits and even stock options.

Reclassification

One way to avoid future liability is to reclassify questionable independent contractors as employees. After determining the identity of the 1099ers, counsel should undertake an individualized assessment as to whether each person or class of persons so identified is legally an independent contractor or actually a common law employee.

The legal test for independent contractor or employee status varies according to the law being enforced. The IRS abandoned its fabled 20-factor test several years ago; its current test is supposedly more simplified, focusing on three principal aspects of the worker's relationship with the business: (1) the degree of behavioral control that the business can exercise over the individual; (2) the degree of financial control that the business can exercise over the individual; and (3) the parties' views and perceptions of the relationship. In the employee benefits arena, the U.S. Supreme Court has stated that the test under ERISA focuses upon the hiring party's "right to control the manner and means by which the product is accomplished."⁴ Although the Supreme Court, the IRS and state agencies have articulated their criteria for determining employee status, the application of these criteria is oftentimes vexing, even to experienced legal practitioners.

Employee Leasing

The use of a responsible employee leasing organization is a practical and viable alternative that allows 1099ers to continue to provide services to the company, yet it substantially minimizes a company's exposure to liability under the tax, employee benefits and labor laws. This alternative can dramatically reduce a company's risk of liability and substantially diminish the likelihood of a lawsuit or an audit by a governmental agency.

Unlike payrolling companies, an employee leasing organization is a third-party employer. Some or all of the company's 1099ers (as well as its long-term temps, project employees, per diems and consultants) can be hired as employees of the leasing organization, which withholds taxes; makes Social Security, Medicare and unemployment payments; pays Workers' Compensation premiums; and may also provide basic medical and dental benefits and offer participation in a 401(k) plan maintained by the leasing organization.

Employers have allowed themselves to be imperiled by such risks because there is a very significant economic inducement to avoid an array of payments required to be made for employees but not for independent contractors. Along with lax enforcement in the past by the IRS and state agencies, these financial incentives have led many businesses to overuse the independent contractor classification.

Conclusion

Now that the IRS and the states have prioritized and targeted employer misuse of independent contractors, companies that use 1099ers to supplement their work force should examine whether they may have legal exposure for employee misclassification. If the potential tax, employee benefits or labor law liability is significant, companies would be wise to seek the most appropriate ways to eliminate or minimize their exposure and comply with laws governing the use of independent contractors. A coordinated, interdisciplinary approach may best serve the company's interests.

There is a significant economic inducement to avoid an array of payments required to be made for employees but not for independent contractors. Along with lax enforcement in the past by the IRS and state agencies, these financial incentives have led many businesses to overuse the independent contractor classification.

The authors are members of WolfBlock's independent contractor compliance working group. Richard J. Reibstein (rreibstein@wolfblock.com) (employment), John A. Nixon (jnixon@wolfblock.com) (employee benefits), Dan A. Schulder (dschulder@wolfblock.com) (tax), and Stuart A. Shorenstein (sshorenstein@wolfblock.com) (government relations) are partners of WolfBlock. Tiffany Raspberry (traspberry@wolfblock.com) is a government relations specialist with WolfBlock Public Strategies.

Use of Health Savings Accounts up 35 Percent; Critics See Them as Tax Shelter

2008-05-12T07:38:00.007-04:00

The number of Americans with insurance plans tied to health savings accounts has passed the 6 million mark, according to America's Health Insurance Plans. HSAs are tax-favored, individually owned savings accounts that can be used to pay for medical expenses in conjunction with a high-deductible insurance plan. About 6.1 million Americans were covered through HSA plans in January 2008, up 35 percent over the same period a year earlier, according to AHIP, a trade association representing insurers. The plans have been in existence since January 2004.

About 30 percent of individuals covered by HSA plans worked for small businesses, 45 percent worked for large employers, and 25 percent bought insurance in the individual market. The small-group market is the fastest-growing segment for HSAs. The AHIP survey found that HSAs are helping more Americans afford health insurance. HSA plans accounted for 31 percent of new coverage in the small-group market over the past year, and 27 percent of new coverage in the individual market.

The average deductible for the best-selling HSA plans in the small-group market was $2,244 for single coverage and $4,356 for family coverage, according to AHIP.

Average annual out-of-pocket limits were $3,462 for single coverage and $6,690 for family coverage.

Premiums averaged $3,189 for single coverage and $8,125 for family coverage.

"The increasing popularity of HSAs is a result of managed care's failure," said John Goodman, president of the National Center for Policy Analysis, a Dallas-based public policy research organization. "The best way to control health care costs is to put patients in control of more of their health care dollars."

Critics of HSAs, however, pointed to another study. The Government Accountability Office found that taxpayers with HSAs in 2005 were, on average, more than twice as wealthy as other taxpayers. Contributions to HSAs were more than twice as high as withdrawals. "HSAs clearly are attractive to higher-income people who are looking for tax shelters," said Rep. Henry Waxman (D-Calif.). "But they aren't the answer for providing adequate health insurance coverage for the average American. This report provides further evidence that we need to re-examine whether this is the right way to use the government's resources to address our health care needs."

The House recently passed legislation that would require HSA trustees to substantiate that withdrawals from the accounts were used for allowable medical expenses. Republicans who opposed this provision said it was designed to undermine HSAs by adding unnecessary administrative burdens. "Democrats should stop trying to dismantle this coverage option," said Rep. Charles Boustany (R-La.). "These accounts help cover the uninsured and lower health costs with preventive care, lower-cost medicines and fewer visits to emergency rooms."

The HSA studies are available at www.ahipresearch.org and www.gao.gov.

The 4 P's of HRO and PEO Evaluation

2008-05-04T08:18:00.016-04:00

By Bruce Silver
May 4, 2008

All too often companies spend hours analyzing, assessing, and comparing the cost or savings that one HRO or PEO service provider offers versus another. While a detailed spreadsheet of costs may help to determine "hard dollar" expenditures, it very rarely accounts for the intrinsic value of the competing service models you are trying to compare.

Usually, items such as the co-pays of a health plan, workers compensation rates and administrative fees take precedence over far more important questions. Are you teaming up with a HRO or PEO partner who offers complimentary strengths or merely duplicative expertise and services? Is your corporate philosophy compatible?

Focusing on our 4 P's will help you to make the "right" choice.

People – Meet with the management and team you will be working with in person, by phone or tele-conference. What are their backgrounds, functions, qualifications, and responsibilities? What are the scope of services each will deliver, how, and how often?

Process – What is the plan for a smooth transition? Map steps for employee notification, orientation, and enrollment. Identify the who, what, where, and when of plan implementation. Set goals, time-lines, reviews and evaluations.

Platform – Human Resource Information Systems (HRIS) provide a robust set of tools for employee administration, benefits, compliance, payroll, and risk management. Identify levels of employee and management access, orientation, and training. How will you coordinate IT staff for system integration with automated attendance and Point Of Sale systems, 3rd party software and hardware?

Programs – Employee Benefit programs provide a competitive edge in attracting and retaining a highly motivated and productive workforce. Evaluate the quality, value, and choices of health, life, dental, disability and retirement plans. What employee communication, mediation, recognition, rewards, and relocation services are available?

Bruce Silver is the founder and managing member of Employers Rx LLC.
The author can be reached at 561.843.4333 or bruce@employers-Rx.com.
Your comments are welcome. For additional information visit our websites:
http://employers-Rx.com
http://peo-quote.com

Ask Questions to Avoid Hiring a Shaky PEO

2008-01-15T08:20:00.000-05:00

newsobserver.com

David Ranii, Staff Writer

The Castleton Group, which shut down last month, was operating as a professional employer organization -- even accepting new clients -- though it wasn't licensed. The Raleigh company was able to do that because it had operated as a PEO before the enactment of a 2005 law that required PEOs to be licensed. Under that state law, Castleton was permitted to continue operating as long as it was pursuing a license. That pursuit included its legal appeal of the Insurance Department's decision to deny Castleton a license.

Some former Castleton clients insist that the Department of Insurance fell down on the job for failing to notify Castleton clients about the company's problems. The Insurance Department position is that it went public as soon as it could -- when it denied Castleton's license in early December. Insurance Department spokeswoman Chrissy Pearson said no other PEOs are in the situation Castleton was: operating as a PEO in North Carolina without being approved by regulators.

But it's still important to do your homework before hiring one. PEOs provide vital services such as payroll and health insurance to small and midsize businesses, so businesses must make sure the company they hire is financially sound and a good fit for their organization.

Here are some questions to ask and things to check.

* Is the PEO accredited by the Employer Services Assurance Corp.? This nonprofit group, better known as ESAC, has tough financial standards, one reason only 25 of the nation's more than 700 PEOs are accredited. Nine in North Carolina are.

Accredited companies must meet operational and ethical standards and are backed by $6 million in performance bonds. That money is available to reimburse clients, their employees and tax authorities if the PEO defaults on obligations.

* Is it licensed by the state?

Companies can be denied licenses for failing to meeting the state's financial standards.

The Insurance Department's Web site lists the 90 companies licensed to do business in the state. Its "listing of active PEOs" is accessible at www.ncdoi.com/FED/SE/ fed_se_home.asp.

If a company isn't on the list, it can't accept new clients. However, more than 40 companies that don't have an office in North Carolina and aren't on the list are authorized by the state to work with existing clients. If your PEO isn't on the state's list of licensed companies and you want to check whether it falls into this category, you can contact the Insurance Department at (800) 546-5664.

* Ask to see an audit.

To get a state license, a PEO must provide the Insurance Department with an independent audit of its finances. You should be able to get an audit from the company, or you can request it from the Insurance Department.

* Find out whether a PEO's health insurance plan is self-funded or if it's providing insurance underwritten by a licensed insurer. The distinction is important.

Licensed insurance companies are required by the state to pay into a fund that can be used to pay claims if the insurer becomes insolvent; self-insured companies face no such requirement.

The vast majority of PEOs don't have self-funded health insurance plans, said Ron Ennis, an Insurance Department manager.

Strategic Sourcing: From Periphery to the Core

2008-01-09T00:37:00.000-05:00

Key ideas from the Harvard Business Review article by Mark Gottfredson, Rudy Puryear, Stephen Phillips.

The Idea in Brief

Almost nothing a company does can't be outsourced anymore--even functions as critical as engineering, marketing, and manufacturing. Yet only 6% of the companies that outsource are satisfied with the practice. Why? Too many managers make outsourcing decisions piecemeal. They focus on incremental cost improvements rather than taking a strategic view of capability sourcing.

With strategic capability sourcing, you don't assume that your company's most vital capabilities must remain in-house. Credit-card giant American Express, for example, outsourced its crucial transaction processing function when it no longer provided proprietary advantage.

To source capabilities strategically, you must also decide which partners can best perform which capabilities. Rather than selecting suppliers based only on cost, for example, Chrysler consolidated component purchases with several suppliers it believed could sustain competitive costs, high quality, and efficient delivery.

And if your company's the best at a particular capability, consider making it an entirely new business--as UPS does by providing logistics management to other companies.

The right capability sourcing strategy can translate into industry dominance: Strategic outsourcer 7-Eleven consistently beats other retailers in same-store merchandise growth, revenue per employee, and inventory turn rate.

The Idea in Practice

To develop your capability sourcing strategy, apply these steps:

Identify your business's "core of the core". These are activities your company does better and cheaper than rivals. For 7-Eleven, they are product ordering and in-store merchandising--the pricing, positioning, and promotion of ready-to-eat food, gasoline, and sundries for car-driving consumers.

Decide what to outsource. Consider two factors:

Proprietary value: A capability has high proprietary value if your company executes it in a way that generates measurably more value than competitors could, and if your company would suffer major strategic damage if rivals imitated the capability.

Commonality: A capability has high commonality if outside suppliers can achieve scale or other advantages by providing it to many others in your industry.

Your strongest candidates for outsourcing? Capabilities that have low proprietary value and high commonality.

7-Eleven decided to outsource human resources, finance, IT management, logistics, distribution, product development, and packaging to outside partners with greater expertise and scale in these capabilities.

Decide what to insource. For capabilities your company excels at, consider "insourcing"--turning them into new businesses by performing this function for other companies. FedEx positioned itself at the leading edge of the $225 billion logistics-outsourcing industry by planning and managing inbound transportation for more than 1,500 product suppliers into 26 General Motors power train facilities.

Decide how to outsource. Compare each of your outsource-worthy capabilities' cost and quality to those of top-performing rivals or suppliers. Use these comparisons to define outsourcing relationships:

Outsource high-cost and unnecessarily high-quality capabilities to low-cost providers--even if that means some reduction in quality.
Outsource high-cost, low-quality capabilities to partners who can reduce costs and boost quality.

Also structure each outsourcing partnership differently, depending on each capability's importance to your company's competitive distinctiveness.

7-Eleven has outsourced all routine capabilities (such as benefits administration and accounts payable) to providers that can consistently fulfill cost and quality requirements. For more strategic capabilities, it makes more complex arrangements. For instance, the firm outsources gasoline distribution to Citgo but maintains proprietary control over gas pricing and promotion--activities that could differentiate its stores if done well.

Workplace Accidents on the Decline

2008-01-04T08:54:00.000-05:00

Tougher regulatory enforcement is curbing on-the-job fatalities and injuries, the government says.

Despite a rise in violations, tougher enforcement of workplace regulations has reduced the number of on-the-job accidents in recent years, according to the Occupational Safety and Health Administration.

Last year, the agency conducted 39,324 workplace inspections, citing 88,846 violations of standards and regulations, a six percent increase from 2006, the agency reported. These included 67,176 serious violations, up nine percent from the previous year, and 2,551 repeat violations.

"The significant increase in citations for serious and repeat violations documents OSHA's focus on identifying and eliminating severe hazards in the workplace," Edwin Foulke, the assistant secretary of labor for OSHA, said in a statement.

Despite the increase in citations, fatality and injury rates continued to decline, the agency said. For 2006, the agency reported a record-low workplace fatality rate of 3.9 per 100,000 employees. Injury and illness rates also dropped to an all-time low of 4.4 per 100,000 employees.

Among other factors, the agency credits a "strong, fair and effective enforcement program" on reducing workplace risks.

By Angus Loten

From Inc.com

Employment-based Health Coverage Could be Near "Tipping Point"

2007-12-10T07:20:00.000-05:00

The end of employment-based health insurance isn’t in sight yet, but a study released Thursday raised the possibility of a “tipping point” that will cause employers to consider alternatives. The Employee Benefit Research Institute said: “If one larger employer actually did drop its health benefits, others might follow for competitive reasons.”

The report published on www. ebri.org said work-based health insurance benefits, which are held by the majority of Americans who have health insurance, are still a competitive tool to attract employees. But between 2000 and 2007, the cost of providing health benefits has doubled, and the percentage of employers that provide health benefits — especially small businesses with fewer than 200 employees — has declined slightly.

Over that time, in which the Consumer Price Index rose 17 percent, premium costs for employee-only coverage rose 86 percent, and family-coverage premium costs rose 80 percent. Copayments for nonformulary brand-name drugs jumped 124 percent. Also, the percentage of employees with employment-based insurance has fallen slightly since 2000, with 71 percent of workers now covered. Between 1994 and 2000, the percentage of workers holding health benefits through an employer had held steady at between 73 and 75 percent, the report said. “While a 4 percentage point drop in the number of workers with health benefits may be significant, it does not imply that these benefits are vanishing”.

Employers interviewed by the nonpartisan, nonprofit research institute expressed divergent opinions about employment-based health insurance, ranging from “it’s the best system available” to “inefficient” and “not intelligent.” One of the main drawbacks of an employment-based system, the report said, is the lack of insurance portability from job to job. Most workers, unless they have pre-existing conditions as specified by the Health Insurance Portability and Accountability Act, can’t stay in the same health plan if they change jobs. Furthermore, between-job coverage through COBRA, the Consolidated Omnibus Budget Reconciliation Act, is often not affordable for people in job transitions.

The institute’s research indicated that the steady erosion of employer-based health-care benefits for retirees shows that a tipping point has already been reached in regard to that coverage. And “most active workers will never be eligible for health insurance in retirement through a former employer,” the report said. While the majority of employers interviewed for the study said they want to offer health insurance as a work force benefit, they think there should be “greater shared responsibility and accountability on the part of workers and their families.” The report noted the trend toward consumer-driven health benefit plans, with high-deductible plans such as health savings accounts or health reimbursement arrangements.

The study also noted significant concern about what would happen if there was “erosion or elimination of ERISA pre-emption of state insurance regulation (which) could result in the complete elimination of employer support for a voluntary employment-based health benefits system.” ERISA is the federal Employment Retirement Income Security Act, which regulates employee benefit and pension plans. What should reverberate through national health-care discussions was this finding:

“(Employers) all agree that if one major employer were to drop health benefits, others would immediately begin to assess whether or not they should follow, on the one hand, or take advantage of others dropping the benefits to enhance talent acquisition.”

One employer interviewed said it would be “insane” to be the first large employer to drop health-care benefits. But many of those interviewed said they would consider following suit under such circumstances as the elimination of the employer tax deduction, movement to a universal health-care system or the erosion of ERISA in favor of state regulatory authority.

Meet Rebecca. She's Here to Fire You

2007-11-02T19:02:00.000-04:00

Inc.com has an interesting article by Max Chafkin on HR Outsourcing and how it is changing the face of business.

Meet Rebecca. She's Here to Fire You

HR Outsourcing Website peo-quote.com Offers Guide to Selecting a PEO

2007-11-02T14:45:00.000-04:00

For Immediate Release

HR Outsourcing Website peo-quote.com Offers Guide to Selecting a PEO

Free Guide Helps Business Owners Learn about “The ABC’s of PEOs”

Lake Worth, FL, November 2, 2007 – Employers Rx LLC announced a new guide designed to help business owners and executives gain a better understanding of the HR Outsourcing and Professional Employer industry. Entitled The ABC’s of PEO: How to Evaluate Professional Employer Organizations, this informative handbook is available on their website at peo-quote.com. The guide covers the brief history of the industry starting with employee leasing and the evolution leading up to the development of today’s Human Resource Outsourcing and Professional Employer Organization’s.

Professional Employer Organizations help growing companies operate more effectively, efficiently, and compete against larger, more established, companies for talented employees. Many leading PEOs offer their clients comprehensive payroll and administrative systems, affordable “Fortune 500” employee benefit plans, and (HRIS) Human Resource compliance and information systems that are either unavailable or too expensive for most small and midsized firms.

There are almost 800 HRO and PEO companies operating throughout the United States. Many business owners find it difficult to navigate the different levels of services, benefit plans, contracts and proposals from the various companies. “The reason we are making our guide available to the public is because understanding the differences when comparing Professional Employer Organizations can be extremely confusing.” said Bruce Silver, founder of Employers Rx LLC, and author of the guide,.“I believe that one of the most important decisions a business owner can make, is selecting the right PEO partner for his or her company and employees.”

Employers Rx LLC launched peo-quote.com a national B-2-B website that will showcase leading HR Outsourcing and Professional Employer Organizations nationwide. The site’s simple interface allows busy executives and business owners to easily find a HR Outsourcing or Professional Employer Organization that is “right” for their company.

Employers Rx LLC is a national HR Outsourcing consulting firm. Our focus is helping businesses find the right HR outsourcing solution for their needs. We assist companies with 5 to 500 employees to be more profitable by outsourcing their non-productive employee management functions, saving business owners time and money.

####

Contact Bruce Silver
Managing Member
Employers Rx LLC
http://www.peo-quote.com
bruce@employers-Rx.com
(877) PEO-CURE

HSA’s – A Year End Tax Planners Dream

2007-10-27T17:34:00.000-04:00

Tax Savings From My Health Plan You Say?

If you have just completed your 3rd quarter review and discovered that Uncle Sam will be taking a bigger bite out of your profits, the cure for your ills may be found in your health plan. HSA’s or Health Savings Accounts were established by Congress in 2003 when they passed the Medicare Prescription Drug Improvement and Modernization Act. When first implemented, it came with a myriad of complicated rules and conditions.

In 2006, President Bush signed the Health Opportunity Patient Empowerment Act which simplified the rules for employees and employers wanting to put an end to ever rising health insurance premiums. Simply put, Health Savings Accounts are like Healthcare IRA’s. Money deposited in your HSA grows tax free, and the funds placed in the account either by you, your employer, or both, uses pre-tax dollars, money that is free from payroll and income taxes.

What Dream?

Unlike an IRA or 401k account, money withdrawn from your Health Savings Account must be used for a wide range of allowable medical, dental, and health related expenses. If not, you are subject to the same 10% penalty and taxes that a 401k plan has. However, money spent for allowable expenses is never subject to taxes either going in or coming out.

The amount you are able to shelter depends on whether you are an individual or have a family of 2 or more people covered by a qualified (HDHP) High Deductible Health Plan. A single person could contribute $2,850 tax free in 2007 and $2,900 in 2008. A married couple or family can contribute $5,650 and $5,800. By taking advantage of an IRS sanctioned Health Savings Account between November 2007, and January of the next year, an individual can shelter $5,750. For married couples or families, their maximum grows to $11,450 in the next 3 months.

Pinch me!!!

Follow this example, John is single. He contributes $2,850 in a Health Savings Account prior to December 31st 2007. In January, John deposits another $2,900. In February, John goes for Lasik eye surgery to repair his vision back to 20-20. The cost is $5,000 which John has deducted from his health savings account. In a period of less than 4 months, John was able to deposit $5,750 tax free, spend most of it, without paying a dime in taxes.

Charles, age 57 and Susan 55, are married, kids are grown, and Charles is covered under a qualified High Deductible Health Plan (HDHP) offered by his employer. His employer is contributing $100 a month for single and $150 for all other employees who applied for the lower cost health plan. Charles plans to contribute the maximum allowed. Because Charles and his wife are over 55, the law allows for “catch-up” contributions of $800 each in 2007 and $900 each. Their catch–up contributions add up to an extra $3,400 or $14,850 between 2007 and 2008.

All that you need is coverage under a qualified High Deductible Health Plan, which by law can be a policy with deductibles as low as $1,100 for individuals and $2,200 for two or more people. Open your Health Savings Account at a bank or other financial institution, and its lights out for the tax man. Pleasant Dreams.

####

Bruce Silver is the founder of Employers Rx LLC, an employee management consulting firm specializing in HR Outsourcing and Professional Employer Organizations.

http://employers-Rx.com

HR Outsourcing for Small Firms Predicted to Double by 2014

2007-10-22T14:55:00.000-04:00

Carrie Aaron, president of PEO Network, and Lisa Rowan, program director of HR and talent management services research for IDC, have written a 5-page article "Double PEO Market Share" for the October 2007 issue of the PEO Insider®.

"The small business economic engine is booming and so goes the PEO industry," said Carrie Aaron, president of PEO Network. "After a setback in 2001 due to post 9-11 and a difficult Workers' Compensation market, the PEO industry is predicted to double by 2014."

"The small business market opportunity is strong in the United States given its size and growth. Employment among small employers increased at a growth rate of nearly 12 percent from 1999 to 2006 according to the BLS. Small companies employ half of all workers in the U.S. private sector," said Lisa Rowan, program director of HR and talent management services research for IDC.

A copy of this must read article is located at http://www.peonetwork.com/articles/aaron1007.pdf

Why Work With A PEO Consultant?

2007-10-09T12:11:00.000-04:00

A PEO Consultant is a person who is a specialist working with PEOs. The typical consultant does an in-depth assessment of your needs and goals before matching you with a PEO. You save hours of research and get the best possible deal from the PEO you ultimately choose. There are hundreds if not thousands of PEOs in the United States alone. You could narrow your choices by visiting a PEO directory such as http://www.peo.com and http://www.employeeleasing.com. A business owner could not possibly evaluate all of the potential PEOs and this is where the PEO consultant steps in.

For more information about working with a PEO consultant visit http://www.employers-rx.com

Evaluating a PEO

2007-10-08T19:46:00.000-04:00

Amy Grimmer, President of Centripetal Consulting Group published an excellent article about evaluating a Professional Employer Organization (PEO). Centripetal Consulting Group are experts in human capital management and they have alliances with PEOs. To read the entire article visit the "Winning" blog.

Direct Deposit Saves Time And Money

2007-10-07T20:06:00.001-04:00

A direct deposit is when your employer deposits your paycheck into your bank account rather than handing you a paper check. Direct deposits save employers money and employees time. Employees no longer have to wait for their paycheck to clear the bank before paying bills or making purchases. Paper checks can be lost, torn or stolen. Direct deposits are secure, confidential and require very little paperwork to set up. Direct deposits are routinely offered by Professional Employers Organizations (PEOs) and Employee Leasing Companies. If your employer does not offer direct deposits ask them to consider working with an employee leasing company that offers this benefit.

Arizona Startup Company Blog

2007-10-07T17:19:00.000-04:00

The Arizona Startup Company Blog has an interesting post about Professional Employer Organization (PEO) here. The article covers an explanation of what a PEO is and what services a PEO typically offers.

If you would like to explore working with a PEO visit http://www.peo-quote.com

What is workmen's comp insurance?

2007-09-01T17:52:00.000-04:00

Workmen's Comp Insurance is a type of insurance required by each state (some exceptions are made) to cover the employer when a worker is injured on the job. Some of the earliest workmen's comp insurance requirements became a reality in the early 1800's. Before this employees received no help when injured while working and often sued the company winning damages that could put the employer out of business. This type of insurance is paid for wholly by the company.... an employee is never required to contribute.

Every state has different requirements for Workmen's Comp insurance. The easiest way to get this insurance while staying on top of state requirements is to partner with a Professional Employer Organization (PEO). To find the perfect PEO visit http://www.PEO-Quote.com

What Is Employee Leasing?

2007-08-15T18:14:00.000-04:00

Employee leasing is when an employer moves employees from his or her payroll onto the payroll of an employee leasing company. The employee leasing company becomes the employer of record for the employees and then "loans" the employees back to the original employer for a fee. This fee includes payroll costs and usually includes benefits. The employee leasing company handles all human resources functions for the employees including but not limited to payroll, legal compliance, record keeping and benefits. Employee leasing firms work with any size company and normally offers an employer a significant cost savings.

What Kind Of Companies Use A PEO?

2007-08-01T14:00:00.000-04:00

A Professional Employer Organization or Employee Leasing Company can work with:

Virtual Assistants
Freelance Writers
Construction firms
Law firms
Automobile shops
Bakeries
Sales organizations
Web designers
Dry cleaning establishments
Spas
Real estate agents
Private investigators
Restaurants
Medical practitioners
Multi-media companies

This list is, of course, only a small portion of the types of companies that work with PEOs. If you would like to join this list visit http://www.peo-quote.com

What Is A Health Maintenance Organization (HMO)?

2007-07-15T06:00:00.000-04:00

Wikipedia defines a Health Maintenance Organization (HMO) as a type of managed care organization (MCO) that provides a form of health insurance coverage in the United States that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. Unlike traditional indemnity insurance, care provided in an HMO generally follows a set of care guidelines provided through the HMO's network of providers. Under this model, providers contract with an HMO to receive more patients and in return usually agree to provide services at a discount. This arrangement allows the HMO to charge a lower monthly premium, which is an advantage over indemnity insurance, provided that its members are willing to abide by the additional restrictions.

Many employers and employee leasing companies offer an HMO as a health insurance option for employees. Websites such as http://www.Peo-Quote.com help employers navigate the maze of health benefits offered by various employee leasing companies.

PEO Services

2007-07-01T06:06:00.000-04:00

What kind of services does a typical Professional Employer Organization (PEO) offer?:

PEO Payroll Administration

* Prepare payroll and distribute checks
* Direct deposit
* W2’s
* W3’s
* Payroll Data
* Withholdings and Tax Deposits
* Payroll record keeping, audits
* I-9 inquiries
* Reports and job costing
* Time clock management
* Vacation
* Payroll software

PEO Workers Compensation

* Claims administration
* OSHA Compliance
* Policy cost
* Dividend plan reviews and audits
* Report and document accidents
* Safety plan creation, administration and training
* Work Comp billing reconciliation
* Safety audits
* NCCI rate reviews

PEO Employee Benefits

* Short term disability
* Long term disability
* Benefits handbook
* Dental insurance
* Health insurance
* Eligibility tracking
* COBRA compliance and administration
* Plan discrimination testing
* Carrier payments and account audits
* Annual plan cost reviews
* 401K administration
* Annual enrollments
* Flexible spending accounts administration
* Section 125 (pretax) premium audits
* Life Insurance plan administration
* Employee assistance plans (EAP) administration

PEO Human Resources

* Legal assistance establishment and retainers
* Employment policies
* Valid employee handbooks
* Manage insurance for Employment Practices Liability (EPLI)
* Unemployment claims administration
* Background checks
* Audit compliance with Wage and Hour (FLSA)
* Audit compliance with ADA – Disability Act
* Audit compliance with EEOC
* Audit compliance with OSHA
* Attendance audits
* Employment applications
* Applicant interviewer training practices
* I9 compliance

The exact set of services bundled for a PEO client are customized to the needs of the employer and his employees. The employer saves money, time and aggravation by partnering with a PEO.

The Only Way A Small Business Can Compete

2007-06-15T17:36:00.000-04:00

A small business owner may feel that he or she cannot compete with a larger organization when it comes to hiring employees. Larger organizations often have extensive benefit plans that are very attractive to prospective employees and it is not unusual for a recruiter to be asked about benefits before salary when speaking to a potential employee.

Small companies can exploit this interest in benefit plans by turning to a Professional Employer Organization (PEO). A PEO can provide a small business with health, life and dental insurance and offers the all important workmen's comp coverage.

A business owner may waste hours on the internet researching potential PEO's based on geography, services offered and pricing when they could more easily turn to a PEO broker such as PEO-Quote.com. PEO brokers do all the research and work for business owners in order to help them choose the perfect PEO company for their group.

Think carefully before choosing a PEO and consider using a broker to help you wade through the myriad of Professional Employer Organizations.

What Is An Employee Assistance Program (EAP)?

2007-05-15T19:15:00.000-04:00

An EAP is a program that offers counseling and assistance with personal and professional issues impacting employees. In the 1940s some employers offered alcohol rehabilitation programs to employees and this has expanded over time to include assessment and assistance with workplace difficulties, marriage and family issues, financial and legal matters and health issues. These programs are typically focus on relieving employee stress and encouraging counseling as an option for many of life's difficulties. Effective EAPs reduce employee absences and increase employee productivity.

Most Professional Employer Organizations include an EAP plan that will work for businesses and non-profits of any size.

Risk Management One Benefit Of Working With A PEO

2007-04-27T18:53:00.000-04:00

The obvious benefit of partnering with a Professional Employer Organization (PEO) is the ability to offer top-notch benefits to employees. A less well known benefit of working with a PEO is that the PEO takes over risk management. The PEO becomes responsible for local, state and federal compliance with various laws and regulations. The ever complicated process of compliance can be handled entirely by the PEO allowing business owners to focus on income producing strategies.

Twenty Years Later Professional Employers Organizations More Popular Than Ever

2007-04-15T18:54:00.000-04:00

Employee leasing became an industry as a result of TEFRA tax legislation in the 1970's. The tax-advantage of working with an employee leasing company became ever more attractive when businesses realized they can outsource all of their Human Resources functions while offering employees a myriad of benefits previously thought to be too expensive.

The industry association, the National Association of Professional Employer Organizations (NAPEO), celebrated the anniversary during their annual conference held September 20-22, 2007. NAPEO encourages members to offer a truly collaborative partnership with clients that goes far beyond simply offering benefits to employees.

Outsourcing has become a popular trend among businesses who look to consolidate business functions while saving money. This growing acceptance of outsourcing has helped the PEO industry to grow at a rapid pace. An important change during the past twenty years is that many states are regulating and licensing PEOs with some states even requiring that PEOs be bonded. These changes have made the industry more stable and more attractive to employers of all sizes.

To discover how you can partner with a PEO visit http://www.peo-quote.com

Health Savings Accounts can do double duty as backup for insurance, retirement booster

2007-03-31T20:48:00.000-04:00

NEW YORK - New rules governing Health Savings Accounts are making them more attractive to consumers, who can use HSAs to help reduce health insurance costs now - and, potentially, in retirement. Health Savings Accounts are like Individual Retirement Accounts for health care. They were created by Congress in 2003 so that workers could cover some of their medical costs with pretax money if they have high-deductible health insurance plans.

The idea is that workers and their employers can fund the tax-free accounts, with withdrawals used for copays at doctors' offices, prescription and nonprescription medicines, and hospital services not covered by insurance. Because unused balances in the HSAs can be rolled over from year to year, some financial advisers are suggesting that the accounts can be a way for families to accumulate money to be used to cover health care costs in retirement, including Medicare deductibles and long-term care insurance.

JoAnn Mills Laing, author of "The Consumer's Guide to HSAs," said that there were 3.6 million HSA accounts at the end of 2006 with $5.1 billion in deposits, up from 1.1 million accounts with $1.2 billion in deposits at the end of 2005. She predicts further growth, in part because more companies are offering high-deductible insurance plans to their workers. That's because these plans are less costly for employers and employees than traditional health policies but still give workers coverage for medical catastrophes.

"Employees who hadn't been able to get insurance coverage are enthusiastic if they can high-deductible policies because it gives them peace of mind," said Laing, who is chief executive of Information Strategies Inc., a human resources consulting firm in Ridgefield, N.J. She pointed out that in addition to payments related to Medicare and long-term care insurance, seniors can use HSA dollars for chiropractic sessions, nursing services, dental care and glasses. To qualify, a health insurance plan must have a minimum deductible of $1,100 for an individual and $2,200 for a family. The maximum out-of-pocket expenses are set at $5,500 for an individual and $11,000 for a family.

Under the old rules, consumers could only set aside in their HSAs the equivalent of their insurance deductibles. The new rules have raised those limits so that an individual can put $2,850 into an HSA this year, while a family can put in $5,650. People 55 and older can add $800 as a "catch-up" contribution. Also new this year, according to the Internal Revenue Service, is that employees can ask their employers to make a one-time transfer of the balance in Flexible Spending Accounts or Health Reimbursement Arrangements into their HSAs. (FSAs and HRAs are specialized, employer-sponsored health plans.) And some consumers can exclude from their gross income an HSA funding from an IRA.

The rules are outlined in IRS Publication 969, "Health Savings Accounts and Other Tax-Favored Health Plans." Qualifying medical expenses can be found in Publication 502, "Medical and Dental Expenses." Hugh Bromma, chief executive of Entrust Group, a retirement plan administrator in Reno, Nev., said high-deductible policies and HSAs "should be especially attractive to younger people who are healthy and don't expect a lot of claims." He doesn't see the HSA as a substitute for retirement savings plans, such as IRAs or company-sponsored 401(k) accounts, since the retirement plans generally allow people to save more. This year, for example, a worker can set aside up to $15,500 in pretax income in a 401(k) account. The funds grow tax-deferred, and are taxable when withdrawn in retirement.

HSAs also are funded with pretax dollars and grow tax free. But withdrawals are not taxed when used for qualified health care spending. "This means the money accumulates tax free and, if you don't use it, it's terrific savings," Bromma said. "So if you can, why not have both a retirement account and an HSA?" Bromma's firm specializes in self-directed retirement accounts, which make it easier for individuals to invest their savings in nontraditional ways, such as in real estate holdings or limited partnerships. He's seeing some of this investing in HSAs, too.

Laing said that about 90 percent of people covered by high-deductible health plans choose to set up HSAs. She added savers last year pulled out just 30 cents for every $1 they deposited - resulting in a balance of 70 cents for future use. "It grows tax free, so there's no reason not to put money into an HSA," she said. "It will be another way to supplement your retirement income."

Bill Makes HSAs More Flexible

2006-12-13T17:08:00.000-05:00

The U.S. House and Senate on Saturday passed a bill that may increase the popularity of health saving accounts. The Tax Relief and Health Care Act of 2006 (H.R. 6408) awaits President Bush's signature.

Under the legislation, employees and employers can contribute up to $2,850 for single coverage and $5,650 for families, even if the deductible is lower. Moreover, companies can contribute more money to HSAs for workers making less than $100,000 per year than for higher-income employees.

The legislation allows a one-time transfer of funds into an HSA from an individual retirement account, health reimbursement arrangement or flexible spending account. The provisions also permit workers hired during middle of the year to enroll in an HSA and make a full-year maximum contribution at that time.

Barry Barnett, a principal at PricewaterhouseCoopers, comments, "I think it's good. I think it'll drive more employers to adopt these plans. It allows people to put in more cash. As they have more cash at risk, they'll be better consumers."

John Hickman, a partner at Alston & Bird law firm, predicts, "This is probably the last, given the makeup of the [new] Congress, favorable HSA legislation we're going to see for a while. We fully expect all of the provisions to be signed [by the president]. Most of these are improvements."

Christopher McFadden, deputy business unit leader for Goldman Sachs' U.S. health care group, notes that Sen. Edward Kennedy (D-Mass.) and Rep. Pete Stark (D-Calif.) are not fans of HSAs and will head key committees on health policy. "What I hope is that this doesn't antagonize these two increasingly powerful members of Congress in a way that incites them to [reverse] the progress that has been made," he adds.

An analysis from the Center on Budget and Policy Priorities states, "HSAs provide a tax subsidy for virtually any out-of-pocket health care costs, including elective procedures not normally covered by health insurance. By enabling individuals to overfund their HSAs, the bill could encourage some people to spend a portion of their excess HSA balances on elective services they would not otherwise consume. The change would primarily benefit high-income individuals, since they are the people most likely to make such a transfer" from an IRA.

The bill garnered praise from the U.S. Chamber of Commerce, the American Benefits Council and America's Health Insurance Plans.

The bill makes "several important improvements to help the growing number of Americans enrolling in these plans and to increase the number of people who will find these plans attractive," says James Klein, American Benefits Council president.

"If you want consumers to prepare for long-term care, they need to develop a long-term strategy," says Karen Ignagni, president of America's Health Insurance Plans. "With higher contribution limits that are indexed to inflation, HSAs will offer new opportunities for consumers to plan for their long-term care expenses."

Early Intervention Key to Reducing Workers' Comp Costs

2006-12-08T07:42:00.000-05:00

Fairfax, Va. - The Public Entity Risk Institute (PERI), a Fairfax, Va., nonprofit risk management training and educational organization, has released a resource guide for controlling workers' compensations costs that focuses on using telephonic nurse injury reporting and triage as important early intervention.

The PERI Day of Injury Resource Manual outlines an effective strategy lays out a proactive approach for addressing rising costs of workers' compensation by establishing processes for responding to employee injuries starting right on the day of injury, says Gerard J. Hoetmer, executive director of PERI. "Our research presents compelling evidence that employer actions on the day of injury have a profound impact on the overall cost of workers' comp claims."

The PERI Day of Injury Resource Manual builds on the findings of a study PERI jointly sponsored with the Schools Insurance Authority (SIA), a joint powers authority based in Sacramento, California.

In partnership with SIA, the PERI Day of Injury study assessed the relationship between employer actions on the day an employee was injured and workers' compensation costs. The study focused on injury reporting, directing medical care, and early return to work initiatives. A major component of the research focused on SIA's use of telephonic nurse injury reporting/triage. The study demonstrated that the nature, duration, cost and eventual outcome of a claim can be largely shaped and controlled by the employer's response on the day of injury.

Based on the study, the manual details injury-reporting processes for organizations to put in place as part of an overall early intervention strategy. This how-to manual also highlights best practices for building a structured return-to-work program and provides organizations with sample forms, checklists, and training materials.

For more information go to www.riskinstitute.org.

http://www.insurancenetworking.com/protected/article.cfm?articleId=4416

Organizations Ripe for HR Outsourcing as They Seek Standardization, Ability to Focus on Business Issues

2006-12-06T07:50:00.000-05:00

Hewitt Survey Finds Companies that Outsource HR are Realizing Benefits

Organizations are primed for human resources (HR) outsourcing as they look to standardize HR processes and focus on business issues, according to a new survey by Hewitt Associates, a global human resources services company. Hewitt’s research shows that companies that have already outsourced HR activities are satisfied with their outsourcing arrangement and are realizing the benefits they hoped to gain.

The survey of nearly 100 large U.S. companies representing 2 million employees finds that the top three pressures facing HR executives today are attracting, retaining and growing talent (67 percent), being able to better support the business by focusing HR on core capabilities (47 percent) and supporting business changes (41 percent). Talent issues and a focus on strategic capabilities continue to be priorities for the next two years.

In a likely effort to make HR more efficient and freed up to tackle the top issues facing HR executives, 91 percent of companies surveyed have undertaken steps within the last two years to improve the internal HR function, such as HR process re-engineering or standardization. In fact, nearly six out of 10 companies surveyed believe HR processes and policies must be standardized before implementing outsourcing activities.

“Companies are realizing that they need to standardize HR processes and policies as a first step in their HR transformation,” said Mark Oshima, director of HRO strategy at Hewitt Associates. “This is often a precursor to outsourcing, since outsourcing enables both HR and line management to focus on issues vital to the business’s strategic initiatives, instead of being burdened with HR administration.”

The Motivation to Outsource

Hewitt’s research finds that organizations consider outsourcing primarily to improve service quality (ranked 4 or higher on a scale of 1 – 6 by 74 percent of respondents). Other key drivers include access to outside expertise, the opportunity for cost savings and a desire to focus resources on core business (all ranked 4 or higher by 60 percent or more of respondents).

Of those companies that have outsourced, 65 percent surveyed reported that they are satisfied or very satisfied with their current HR outsourcing arrangement. Furthermore, 70 percent of respondents say their companies have realized the benefits they hoped to gain from HR outsourcing.

Still, barriers to HR outsourcing remain. Nearly two-thirds of respondents say there are barriers to HR outsourcing at their organizations, with the top three being concerns about losing control of key processes, concerns about employee reactions to an external service provider and difficulty building a business case.

“By and large, companies that have taken the leap and outsourced their internal HR activities are realizing the results and goals they hoped to attain,” said Oshima. “Remember, though, that outsourcing is a major commitment. Companies considering HR outsourcing should identify the business issues that outsourcing is expected to address, build a solid business case, involve key decision makers, learn from the experiences of their peers and proactively manage the change from delivering services internally to partnering with an outsourcing provider. These important steps can help make the outsourcing arrangement a successful one.”

Other key research findings:

* The majority of respondents (78 percent) prefer an HR outsourcing provider with in-depth HR consulting expertise versus a broad outsourcing provider that can provide services to multiple parts of the organization.
* Forty-four percent of respondents indicated that cost savings was not one of the primary objectives they hoped to gain by outsourcing. Among those for whom cost savings was a primary objective, nearly three-quarters (73 percent) said they had achieved their cost savings objectives.
* The majority of survey respondents include service level agreements in their HR outsourcing contracts. Data delivery and transaction accuracy are the most common standards included in agreements, each cited by more than two-thirds of companies surveyed.
* The CEO is the final decision maker when considering HR outsourcing, cited by more than half (52 percent) of respondents

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20061206005056&newsLang=en

Health Care Premiums Outpace Oklahomans' Earnings

2006-11-29T17:41:00.000-05:00

Sean Murphy
Associated Press

The cost of health insurance for Oklahoma families rose more than four times faster than their wages over the last six years, according to a new study. The report released by Families USA, a nonprofit health care consumer advocacy group based in Washington, D.C., said that from 2000 to 2006, health care premiums for Oklahomans jumped 59.9 percent, while median earnings rose 13.1 percent.

"Oklahoma families have been hit hard in the pocketbooks due to skyrocketing health costs and stagnant wages,'' said Ron Pollack, executive director of Families USA. "As a result, Oklahomans are paying much larger portions of their paychecks on health care, and health care is becoming less and less affordable.'' The combination of higher health care costs and slower wage increases is leading to an increasing number of uninsured and underinsured Oklahomans, the group reported.

There are currently an estimated 650,000 Oklahomans without health insurance, said David Blatt, public policy director for the Community Action Project, a Tulsa-based anti-poverty group. While state lawmakers have taken some steps to address the problem, like an initiative pushed by Gov. Brad Henry to expand health insurance coverage to small businesses and their employers, more action is needed, Blatt said.

"It seems like the state has been bailing water out of a leaky ship with a very small bucket,'' Blatt said. "Frankly, we're going to need a more aggressive approach or to add other strategies if we're going to make a serious dent in the number of uninsured Oklahomans.'' Henry's "Insure Oklahoma'' initiative originally was signed into law in 2004, providing government subsidies to businesses with 25 or fewer employees to buy health insurance. The program was expanded this year to cover businesses with 50 or fewer workers.

Besides problems with the affordability of health insurance, Oklahomans are facing other financial burdens with the increasing cost of gasoline and utilities. "We know that despite the state's current overall growth, median households are not seeing substantial income growth,'' Blatt said. "That means less income for other necessities and, in many cases, growing debt as families struggle to pay out-of-pocket health insurance costs.''

The Families USA report cites a study that found more than half of bankruptcies are now due, at least in part, to problems with medical costs. "If this troubling trend continues, the health care affordability crisis will get much worse and many more Oklahomans will become uninsured and underinsured,'' Pollack said.

IRS Announces 2007 HSA Limits

2006-11-22T08:40:00.000-05:00

CHH Online

The IRS issued guidance on the maximum contribution levels for health savings accounts (HSAs) and out-of-pocket spending limits for high deductible health plans (HDHPs) that must be used in conjunction with HSAs. These amounts have been indexed for cost-of-living adjustments for 2007.

Annual contribution levels

* For 2007, the maximum annual HSA contribution for an eligible individual with self-only coverage is $2850. (Note: for any individual, the maximum contribution is the lesser of the indexed amount or the deductible of the HDHP.)
* For family coverage the maximum annual HSA contribution is $5,650.
* Catch up contributions for individuals who are 55 or older is increased by statute from $700 to $800 for 2007.
* Both the HSA contribution and catch up contribution apply pro rata based on the number of the months of the year a taxpayer is an eligible individual, and, with respect to the catch up contribution, the number of months of the year that the taxpayer is age 55 and over.

Out-of-pocket spending

* The maximum annual out-of-pocket amount for HDHP self-coverage increases to $5,500 and the maximum annual out-of-pocket amount for HDHP family coverage is twice that, $11,000.

Minimum deductible amounts

* For 2007, the minimum deductible for an HDHP increases to $1,100 for self-only coverage and $2,200 for family coverage. (IRS Rev. Proc. 2006-53, IRB 2006-48, Nov. 27, 2006.)

http://hr.cch.com/news/payroll/112106a.asp

OSHA Proposes $328,000 in Penalties for 2 FL Contractors

2006-11-22T08:25:00.000-05:00

CHH online

OSHA proposes over $328,000 in penalties for two Florida contractors after triple fatality at Miami Beach jobsite.

OSHA has cited two Florida construction companies following the investigation of a roof collapse in which three workers were killed. The fatal accident occurred May 6, at One Bal Harbour on Collins Avenue, Miami Beach. Proposed penalties total $297,500 for Southland Forming and $30,525 for the general contractor Boran Craig Barber Engel Construction.

Three Southland employees died when formwork and poured concrete for the roof level of a condominium building collapsed, trapping them on the level below. A fourth worker was hospitalized with serious injuries. OSHA issued four willful citations to Southland for failing to design and erect formwork that would adequately support the weight of concrete being placed upon it; failure to properly position and ensure stability of shoring posts; and failure to conduct inspections during the concrete pour.

The company also received four serious citations for failing to determine that planned formwork would not support a change to the roof design; to assure that shoring and support posts were properly erected; and to properly train employees. The general contractor also received four serious citations. Two, directly related to the accident, were for exposing workers to the collapse by failing to assure that structures were designed to support concrete and posts were properly attached to formwork. The other citations were for allowing a load that was raised by a crane to be lifted above workers and failing to adequately light a stairway, exposing workers to struck-by and tripping hazards.

The companies have 15 days to contest the citations and proposed penalties before the independent Occupational Safety and Health Review Commission.

http://hr.cch.com/news/safety/112206a.asp

Onsite Triage Savings are no Accident

2006-11-11T07:42:00.000-05:00

Convenience Store Decisions

Curtis Smith

Innovative ways to lower workers’ compensation costs with strategic sourcing.

There's a clear need for keeping workers' compensation costs down, but simply reducing benefits is not a practical answer. Human resources, safety and risk managers in the convenience store industry need to consider innovative approaches to improving employee health and safety while containing workers' compensation costs for the employer. The industry needs healthy employees in order to be productive, and people without effective health care cost employers and society more in the long run.

One viable option is "strategic sourcing." Workplace health care is a strong candidate for outsourcing because of rapidly rising costs, an increasingly complex regulatory environment and the growing need for sophisticated clinical and technical capabilities. Companies partner with providers of specialized occupational healthcare services because of their specific expertise, experience and results in delivering health care onsite and online in the workplace. Innovative, new approaches to containing workers' compensation costs are emerging from outsourced partners.

Why C-Stores Outsource Health Care

There are several reasons why convenience stores outsource health care:

* COST SAVINGS. Reducing workers' compensation costs through improved health services is a key focus. The amount of savings can vary, principally on what the costs are before the strategic outsourcer is brought in. In a hard insurance market where most companies work to limit the annual increase in their health costs, some stores actually see total incurred workers' compensation costs decrease.
* IMPROVED SYSTEMS. Outsourcing firms often achieve better results because they are focused on their core competency: delivering health care in the workplace. They have developed the proprietary systems necessary to be successful, including recruiting and training nurses and doctors who are best suited to workplace health care. These resources cost millions of dollars and take many years to develop. Outsourcing businesses can deliver them economically because the cost is spread over a vast client base.
* SHARPER FOCUS. Freeing key managers' time and efforts to focus on core competencies is a real advantage of outsourcing. For example, companies typically want HR managers hiring, training and supporting the people that are mission-critical to their business, not hiring nurses and overseeing a medical department. The same is true for safety departments, which are often also tasked with other regulatory responsibilities.
* PRODUCTIVITY. Better medical results raise stores' productivity because treating more employees onsite keeps them on the job. Taking preventive measures that support safety helps prevent injuries that could present a drain to workers' compensation costs. Should an injury or illness occur, improving case management and accommodating restrictions also helps employees return to work sooner.

While health care delivery in the convenience store industry is not new, the way it is delivered has recently taken a novel turn. Outsourcing providers have made great strides in offering a variety of innovative services, including patented software, specially trained staff and proprietary systems to deliver injury triage, drug and alcohol testing and background screening services. There are several health care outsourcing services that contribute to cost savings and improved worker safety, some of which have helped many convenience stores reduce injury claims by up to 50%.

Field Notes: UDF Turns to 24/7 Injury Reporting and Triage

When an employee is hurt at work, convenience store managers have few good options for responding. Typically, there is no one on staff at the store with medical training to provide adequate care or even to make a reliable decision about the seriousness of the injury. Sending employees to acute care clinics can incur costs that, in hindsight, were not needed. On the other hand, not sending employees may incur unacceptable risks. After hours and on weekends, emergency departments may be the only available provider—the most expensive choice. Too often owners or insurance managers do not even find out about claims until after the fact.

United Dairy Farmers (UDF) is a good example of a convenience chain using an innovative way to reduce the number of injury claims on the job. Cincinnati-based UDF operates nearly 200 stores throughout Ohio, Kentucky and Indiana. The chain combines the nostalgia of an old-fashioned ice cream parlor with all the benefits of a modern convenience store, and, in many cases, UDF stores are linked alongside full-service gas stations.

When Donna Hadley, UDF's manager of payroll and benefits, was looking for a better way to reduce on-the-job-injury costs, she turned to Medcor's 24/7 injury reporting and triage service. In this type of service, specially trained nurses are available to clients 24 hours a day. Whenever an injury occurs, employees can call a toll-free number and speak directly to a registered nurse. Using proprietary software and physician-designed algorithms, nurses determine the severity of the injury and the best course of action. Unnecessary medical care is avoided. Many cases can be resolved with simple first aid. Store managers can be rest assured that potentially serious cases are referred and never minimized. If the employer's insurance includes a preferred network, the system automatically directs employees to those providers. Translators are also available for employees who are not comfortable speaking English.

"Prior to the triage service, we had an employee injury report hotline: me. A lot of times, messages would be incomplete and I'd spend hours or even days tracking down the right details. Now, I get faxed a comprehensive report almost immediately after an injury occurs."Donna Hadley, UDF's manager of payroll and benefits.

All calls are digitally recorded, providing both deterrence and defense against fraudulent claims. Confidential reports about all incidents are sent to the employer's designated managers within minutes of the call. "Prior to the telephone triage service, many workers were using the emergency room because they didn't have a primary medical care provider, and visits to the ER for a minor injury cost as much as $800 per visit," Hadley said. "Now, the hotline nurse can direct employees to an occupational medical clinic if necessary, where a bill for treating the same injury might be closer to $80. In many cases, the self-care instruction provided by the triage nurse is sufficient, so costs can be avoided all together."

Many convenience stores find that, aside from telephone and online triage and reporting, outsourcing-more "traditional" approaches to a health care services firm can help further control costs and improve employee safety. Two such examples are drug and alcohol testing and background screening.

Drug and Alcohol Testing

Nationwide, one in 10 employees has a drug problem, and alcohol abuse rates are even higher. Drug and alcohol abuse contributes to thousands of workplace injuries and millions of dollars of related costs every year. Customer service, attendance and productivity are also affected. Drug testing is difficult to implement, especially for small worksites like convenience stores. Franchisees are challenged by complex drug laws that can vary by state, privacy regulations and concerns about the speed, cost, accuracy and liabilities of testing.

Solving these problems is worth the effort. Recent studies have shown employers that implement drug testing have reduced workplace injury rates by 51% within two years. These same employers saw an average reduction of 11% in their workers' compensation experience rating when they renew their insurance. When deciding whether to outsource drug and alcohol testing services, there are several important factors to consider. The health care outsourcing firm should offer policy review and development to fit each client; collection sites and 24/7 service anywhere in the country; all necessary forms and supplies; certified labs with GC/MC confirmation; physician medical review; new-hire, random, post-accident, and other tests; rapid and confidential results and reports over a secure Web-based system; and fast and friendly customer service representatives. Finally, the provider's legal staff should ensure all services are in compliance with the laws in each state.

Background Screening

Recruiting good employees is critical to every convenience store operation, and background checks and other new-hire screenings are vital components of this process. Effective screening also reduces turnover, prevents unnecessary training costs and improves retention and morale—all contributing to a great culture. Background screening services should include criminal history, education verification, prior employment confirmation, reference checking, motor vehicle records and credit reports. Health care outsourcing firms should also provide program review and development to ensure each franchisee has the right policy and only uses the screening services they really need and from which they can really benefit. Purchasing screening services that are not required is an unnecessary expenditure that counteracts cost-containing occupational health strategies.

Conclusion

Workplace injury management is one area where improved quality costs less, as is the case with UDF. It is in every convenience store's interest— and every employee's interest—to have a safe workplace, to use best practices in treating injuries when they do occur and to manage cases and regulatory health services effectively. While employee testing, screening and injury prevention is critical, the highest safety provisions do not always guarantee the inevitable. Using on-site and online outsourcing services through a knowledgeable and experienced health care outsource provider puts you in greater control, keeps your occupational health team focused on important issues and significantly reduces workers' compensation costs.

PEOs cover ABCs of Human Resources

2006-11-06T07:33:00.000-05:00

Akron Beacon Journal

Companies take care of hiring, payroll and benefits

For many small businesses, the administrative burdens of hiring, managing and paying employees can be overwhelming. As a result, many business owners are turning to alternative methods of hiring staff, including something called the "professional employer organization'' or "PEO''.

PEOs are companies that help businesses find and hire people, plus manage such things as health benefits, workers' compensation claims, payroll, unemployment insurance and more. As a business owner, you contract with a PEO to assume these and other responsibilities, allowing you to concentrate on the revenue-producing side of your operations. PEOs establish and maintain an employer relationship with the workers assigned to you and assume many employer responsibilities and risks.

Most small businesses are new to the ``human resources'' or ``HR'' field. One advantage of using a professional employer organization is that they already have experienced HR pros who can handle benefits, payroll, Occupational Safety and Health Administration compliance and just about everything else you will need. By bringing employees into a larger overall group, a PEO can offer your workers benefits, such as health insurance and retirement plans, that you would be hard-pressed to deliver on your own.

Pre-employment testing is another area where PEOs can help. Without a screening process, you risk placing the wrong person in the job, leading to lost productivity and costly turnover. PEOs tailor pre-employment tests to predict loyalty to you as well as success on a specific job. The tests aren't foolproof, but they can have a big impact.

Small-business owners often dread the prospect of reading stacks of resumes and conducting interviews for prospective hires. PEOs can reduce this burden and deliver candidates quickly, then handle the paperwork for the new hire. Some PEOs have entire divisions devoted to recruiting and helping small-business owners gather information to make the right hiring decisions.

Many entrepreneurs who have used PEOs credit the choice with helping grow their businesses quickly. The National Association of Professional Employer Organizations (NAPEO) is a good source of information and help. The organization's Web site at www.napeo.org describes how PEOs work, the benefits of using one and guidelines for selecting one that's right for your business.

FL Workers Comp Rates to Drop 15.7%

2006-10-31T08:00:00.000-05:00

South Florida Business Journal

Florida's insurance commissioner got what he wanted: Workers' compensation insurance rates are to fall by a statewide average of 15.7 percent, effective Jan. 1. Commissioner Kevin McCarty approved an amended rate filing submitted by the National Council on Compensation Insurance (NCCI).

His office estimated the overall average rate decrease of 15.7 percent will produce a savings worth more than $400 million for Florida employers. Earlier this month, McCarty asked NCCI to amend its original filing, citing disagreements with the methodology NCCI used to project losses and with the trend factors used in the filing.

Per industry group, the rate drop is to be 15.4 percent for manufacturing, 16 percent for contracting, 16.2 percent for office and clerical, 15.3 percent for goods and services and 15.7 percent for miscellaneous other industries.

The decrease is the fourth consecutive rate drop since the government reformed the state's workers' compensation system in 2003. Rates dropped 13.5 percent for 2006, 5.1 percent for 2005 and 14 percent for 2004. The cumulative overall average rate decrease for the period totals more than 40 percent, McCarty's office said.

http://www.bizjournals.com/southflorida/stories/2006/10/30/daily16.html?f=et81&hbx=e_du

Is It Time to Outsource Your HR?

2006-10-27T12:00:00.000-04:00

By Layne Davlin

When the time comes to start hiring staff, a lot of entrepreneurs fail to give much thought to all the responsibilities that come with being an employer. The average small-business owner isn’t equipped with either the knowledge or the time to comply with the mountain of regulations required by the government. Fortunately, HR outsourcing--hiring a PEO to oversee your HR tasks--is a solution that not only provides help with compliance issues but can also provide assistance that’s tailored to your company’s specific needs.

A PEO, or Professional Employer Organization, can offer HR solutions tailored to small and midsized businesses in all industries. For an annual fee, usually 2 to 7 percent of the dollar value of your annual payroll, a PEO will take care of everything from recruiting and hiring to managing your health benefits. Since many smaller businesses can’t afford to hire an HR professional, PEOs can be a cost-conscious option. For instance, if a company has a $1 million payroll, a PEO can provide the equivalent of a full HR department for roughly $20,000 to $70,000 a year, considerably less than a fully staffed HR department or even one qualified executive.

Generally, a PEO will legally hire a company's current employees, thereby making the PEO the "employer of record" for taxation and insurance purposes. Having the employees of multiple businesses “on staff” allows PEOs to enjoy lower benefits’ costs because more employees mean better rates. The employees are then leased back to the original employer (now a PEO client) under a shared-employment contractual relationship, which sets out the powers, responsibilities and liabilities of the parties. This practice is also known as “employee leasing” or “staff leasing".

The PEO then assumes responsibility for all payroll obligations, workers’ compensation coverage and tax filings. Additionally, health, welfare and retirement benefits can be contracted as well as all associated administrative work. Because they take over most of the headaches of being an employer, PEOs are ideal for small businesses. In fact, most PEOs target companies that have 150 employees or less.

Many times, a PEO arrangement is the only way a small business can offer benefits like health insurance, dental and vision care, life insurance, retirement saving plans like 401(k)s, Section 125 cafeteria plans (flexible spending accounts for healthcare and childcare), job counseling, adoption assistance and educational benefits. Most small businesses just couldn’t afford or manage these benefits on their own.

Finding the Right PEO for Your Company

Ideally, a PEO will relieve its client companies of the time-consuming and money-draining burdens associated with HR. Because PEOs offer many different types of services, choosing the right PEO is essential. If you’re thinking about hiring a PEO for your business, consider the following factors to find the best possible PEO arrangement to meet your needs:

Conduct a basic needs analysis. Lay out exactly what type of HR and risk management concerns your company has.
Review the services of all the PEO firms you’re considering. Find out which firms can meet all your needs and will do so in a manner that meets--if not exceeds--your expectations.
Perform extensive background research to find out if the PEOs’ sales pitches are really what they deliver.
Check out the companies' staff. Does it have the depth and expertise to deliver on its promises?
Find out how the firms deliver their services. In person? By phone? Via the web? A mix of all three?
Determine what kind of consulting the PEOs provide on strategic HR issues like recruiting, HR procedures and processes.
Ask for a few references, and then check them. If a particular PEO can’t relieve your HR burden, one of the other ones certainly can.
Find out if the PEOs charge any upfront fees and how those fees are determined. What about pre-payments? Do you have to put up a deposit?
Ask for some demonstration that payroll taxes and insurance premiums are being paid properly, and that any past clients’ legal issues have been correctly and efficiently handled.
Once you’ve selected the PEO you’ll be hiring, lay the foundation for a lasting relationship with your PEO by meeting the people you’ll be working with face to face. An open line of friendly communication ensures you won’t be lost in the in-box.

The bottom line is, PEOs can help small and midsized employers enjoy the same HR benefits as large companies without the considerable overhead. A PEO costs less than hiring an internal HR employee and will maintain critical employment records and payroll reports, as well as provide the forms needed to make sure you’re in compliance with all required employee regulations. Being an entrepreneur is difficult enough without all the accompanying HR hassles, so find a PEO for your company today.

Chatsworth, Calif. CEO and Wife Arrested for Alleged Workers'

2006-10-24T09:30:00.000-04:00

Insurance Journal Online

Three suspects in connection with a workers' compensation premium fraud investigation conducted by the California Department of Insurance (CDI), Fraud Division have been arrested.

A felony complaint was issued by the Los Angeles County District Attorney's Office charging Gad Leshem, 59, with four counts of premium fraud and one count of conspiracy. A felony complaint was also filed against Zeev Golan, 54, and Irit Golan, 52, charging both with four counts each of premium fraud and one count of conspiracy. Bail for each of the defendants has been set at $6.5 million dollars. If convicted, each of the defendants could be sentenced to a $50,000 fine or double the amount of the fraud and up to five years in state prison.

Gad Leshem is the president/CEO of Cover-All Inc., a flooring and carpet installation company headquartered in Chatsworth, Calif. Zeev Golan is the vice president and his wife, Irit Golan is employed as the executive secretary and payroll supervisor.

According to CDI, Cover-All obtained a workers' compensation policy State Compensation Insurance Fund (SCIF) on Sept. 1, 2001. SCIF conducts routine audits of policy holders as part of its normal procedures. The audits revealed that the payroll reported to SCIF was significantly lower than that reported to the Employment Development Department (EDD). As a result, SCIF referred the case to the CDI Fraud Division.

During the course of the investigation, it was learned that Zeev and Irit Golan were responsible for preparing the alleged fraudulent monthly payroll reports provided to SCIF. The monthly payroll reports were reviewed and approved by President Gad Leshem. Leshem and Zeev Golan also provided the alleged fraudulent payroll documents that were provided to SCIF during the routine audits. The investigation conducted by the CDI, Fraud Division determined that from Sept. 1, 2001 to April 16, 2005, Cover-All. underreported payroll of $26,937,575 to SCIF. This underreported payroll resulted in a premium loss of $7,565,009, CDI said. SCIF also assisted in the investigation.

http://www.insurancejournal.com/news/west/2006/10/24/73513.htm

Employers Rx Launches HR Outsourcing Website

2006-09-07T09:05:00.000-04:00

Industry Preview of peo-quote.com at NAPEO Conference at Boca Raton Resort & Club

LAKE WORTH, Fla.--(BUSINESS WIRE)--Sept. 7, 2006--Employers Rx LLC, a South Florida HR consulting firm, announces the launch of peo-quote.com (http://www.peo-quote.com), their new B-2-B website where business owners from across the country can easily find the right HR outsourcing solution for their company. The website will showcase leading employee leasing, HR outsourcing companies, and professional employer organizations nationwide.

Visitors to the peo-quote.com website are greeted with a clean, user-friendly interface. Business owners will have the ability to click on their state and compare details of 8 key areas that professional employer organizations administer for clients including payroll, health insurance, HR systems, risk management, and workers compensation. With a click of the mouse, busy executives now have the ability to examine the different and varied benefits and services offered by qualified professional employer service companies doing business in their state. Quotes can be requested from all of the companies viewed, or select only the firm who's coverage and services best fits their needs.

Employers Rx will be introducing peo-quote.com at the (NAPEO) National Association of Professional Employer Organization annual conference. The national convention for the HR outsourcing industry is being held on September 11-13th at the Boca Raton Resort & Club in Boca Raton, Florida. Attending the conference will be owners and officers of nationally recognized industry leaders, including Administaff Inc., AlphaStaff Group, Inc., Oasis Outsourcing, and SCI Companies.

Attendees will have the opportunity to learn about the tremendous potential of the peo-quote.com website. "The initial reaction from companies who have previewed the site has been very positive," said Employers Rx Founder and Managing Member, Bruce Silver. "Ultimately, the success of the site will be determined by the firms who partner with us." When fully populated, the site will offer a choice of PEOs in all 50 states.

Companies with 5 to 500 employees operate more efficiently and effectively when outsourcing their non-productive administrative and regulatory tasks. Businesses are more profitable when executives can focus on more important issues of marketing, product development, or sales. Agricultural and Industrial companies can greatly benefit from reduced workers compensation rates and risk managers, whose job is developing programs that foster a safe and productive workplace. The website is available for viewing by logging on and going to http://peo-quote.com. For additional information, contact Bruce Silver of Employers Rx LLC by email to bruce@employers-Rx.com or by phone at (877) PEO-CURE (736-2873).

Employers Rx LLC is a national HR Outsourcing consulting firm. Our focus is helping businesses find the right HR outsourcing solution for their needs. We assist companies with 5 to 500 employees to be more profitable by outsourcing their non-productive employee management functions, saving business owners time and money.

http://biz.yahoo.com/bw/060907/20060907005733.html?.v=1