Do I Really Have to Worry About Employee Labor Laws?

A common experience of business owners and key persons within the company is that they need more time to be able to grow their business and less time to be spent on managing the human capital side (such as transactional Human Resources, Workers Compensation, Payroll and Benefits administration). Often times the person(s) within their company that handle these areas is not able to keep up with the constant changes to Labor Laws…not to mention now having to deal with Health Care Reform. But what options are out there? How can business owners get back to the place where they can create solutions that are cost effective for them, with the highest level of professionals in the areas of Human Resources, Workers’ Compensation, Benefits and Benefits Administration, and Payroll?

If you are a business owner or know of someone who is a business owner or works for a small to mid size business (15 – 200 Employees), you may or may not be surprised to know that many business owners are now looking to outsourcing these areas to businesses that specialize in these areas. It is not uncommon to find services such as payroll, legal advice, accounting, benefits and benefits administration and insurance already being outsourced. The challenge is that it is being outsourced to too many other companies and the in house responsible party for the business is left managing sometimes up to 10 different relationship, and coordinating between all companies and staying informed becomes another job in itself! Since the government is cracking down more and more on compliance and Healthcare Reform is taking on a new shape every day, it is becoming more and more important to minimize in house transactional- nonrevenue-generating activities, and instead direct all in-house staff members towards growing the business.

Staying informed and compliant is more important than ever. In 2011 Companies paid over $346 million to resolve Equal Employment Opportunity Commission (EEOC) charges. Also, of the almost 100,000 complaints that were filed with the EEOC that year, 37.4% were charges of retaliation; 35.4% were charges of racial discrimination; and 28.5% were charges of sexual discrimination. And do you think that most, if not any, of these companies expected this to happen? Probably not. Fines like this could ultimately put small to mid size companies out of business, all because they internally did not prepare properly to protect themselves from the potential liability associated with having employees. It is so easy to let things slide within the company because in-house persons are overworked or just don’t know what they don’t know! The U.S. Immigration and Customs Enforcement (ICE) conducted almost 2.500 audits in 2011, resulting in 224 employers criminally arrested and $10.4 million in fines levied. Needless to say, the litigation and compliance environment is a harsh reality for business owners. So to lead their organization, they need a partner who can keep an eye on changing legislation and keep their company compliant and out of the courtroom!

Many organizations find that partnering with Professional Employer Organizations (PEO) for their Human Resources Outsourcing. PEOs have the ability to handle the HR, Workers’ Compensation and Risk Management, Benefits and Benefits administration, and Payroll side of the business. In doing so, they provide a solid solution that can help increase their profitability and employee productivity, while decreasing the time that their staff spends on transactional HR, the liability associated with having employees and their overall labor costs. Since business are already outsourcing, a PEO allows them to outsource to one group of professional, one group of experts that can be there to help handle issues when they come up, and there will be issues, rather than having to deal with multiple vendors who have little to zero accountability to ensure that the job is done correctly.

For more information on PEOs and how they can help you, go to http://www.milliondollaremployee.

Contact Dray Carson at 480.229.3363 for a complimentary evaluation to see if a PEO would benefit your business!

Credits: PEO Insider Magazine, December 2012-January 2013 Issue (Volume 16, Number 10)