PEOCompare Blog

1800 HR Pros Reveal What They are Wanting in an HRIS

Carolyn Sokol — Mon, 06 May 2013 21:30:00 GMT

Below are some interesting numbers pulled from the 2013 HRIS Requirements Report published by our friends at compareHRIS.com.

This infographic provided courtesy of compareHRIS.com.

Of Grandfathers and Cadillacs - Health Plan Status is Making My Head Spin

Carolyn Sokol — Fri, 03 May 2013 16:30:00 GMT

It can’t just be me. Do you find the latest round of changes in the status of health care plans tiresome and tedious to decipher?

The latest statistics I have seen describe a significant shift in the attitude of small business owners to eliminate their compliant but “grandfathered” programs and implement ones that are more fully in line with the government mandates. The aim is, of course, to avoid penalties for non-compliance. Still, I wonder at the cost of changing one compliant plan for another simply to avoid a future hassle. The calculations are intense to say the least.

Similarly, companies with so-called “Cadillac” plans face the same scrutiny and decisions. These high-value health care plans provide benefits that far exceed those of more mundane ones. For example, many of these plans have no deductibles and co-pays under $20 for a visit to a primary care physician.

The government doesn’t really look closely at the real value of these plans. It is simply a matter of cost and of perceived “fairness.” In short, if your company pays more than a certain amount for either individual or family plans, then the plan is considered a high-value or Cadillac plan and will be subject to a non-deductible, excise tax of 40%. How’s that for motivation to eliminate Cadillac plans?

Health care benefits are an essential element of finding, recruiting and hiring the best talent as well as retaining them after the fact. Still, the PPACA and its future iterations are becoming more and more complex and the time required to understand the mechanics of the process as well as its tax ramifications are enormous.

If you would rather concentrate on running your business and leave the challenges of the PPACA to the experts, consider retaining the services of a Professional Employer Organization. PEOs spend their time demystifying and understanding the implications of existing labor law and its ramifications for small to mid-sized businesses. The expertise of these companies is indispensable when it comes to benefits administration and its tax consequences.

Forget grandfather clauses and Cadillacs. Consider the advantages of a PEO. Eliminate some aggravation and save your time, your energy and other resources to grow your business.

SHOP - Is Health Care Delayed or Denied?

Carolyn Sokol — Tue, 23 Apr 2013 16:52:00 GMT

In a stunning departure from their avowed goals, the Obama administration has decided to delay the implementation of the Small Business Health Options Program (SHOP). The plan was touted as a way to provide affordable health insurance to small businesses and their employees and was one of the main selling points of the entire Patient Protection and Care Act (PPACA).

The delay is just another instance of the government’s inability to recognize the ramifications of its actions. While demanding that small business owners comply with the mandated edicts in a timely manner, the government, despite massively larger resources, cannot do the same. While politicians pound the table with demands that speak solemnly about the need to “do something,” they are remarkably unable to implement their schemes. It is just another betrayal to the working people of this country.

What is SHOP?

With all that said, the small business owner must still acquiesce to the law. So here are some of the particulars about the Small Business Health Options Program.

As originally written, the law would have the federal government establishing “health care exchanges” in every state. These entities would provide a multitude of healthcare insurance plan options for small businesses.

In turn, this would allow employers to choose the level of health insurance coverage that they would offer. Employees would then be free to choose from a variety of qualified health plans. The idea was that employers could offer multiple plans but have a simplified system of payment.

Originally the SHOP would go into effect in January, 2014 but the government expected that most states would opt out of the “exchange idea’ and did not foresee that 33 states chose the “exchange” option. Overwhelmed by this denial of their fiat, the federal government must struggle to provide what they promised. Unfortunately, they are not prepared to do so and have delayed implementation of the SHOP until at least 2015.

The Ramifications

Citing “operational challenges,” the Obama administration has failed in its obligation to adequately provide the insurance markets or “exchanges” that would allow for employees to have a choice. Instead, the vast majority of small employers buying through the exchange can offer only a single option. In addition, a single option does nothing to increase the downward pressure on insurance costs. It is a lose-lose proposition with everyone from employee to employer expecting to pay more premiums for less benefits.

In the most telling example of the “bait and switch” tactics utilized by the Federal government in passing the PPACA, the two states, (California and Connecticut) with the most advanced state run exchanges have opted to not provide choice for their members as it is NOT mandated in the federal guidelines.

What to Do?

If you are confused about this issue – and many are, including the architect of the plan, Sen. Jay Rockefeller – consider the benefits of using a Professional Employer Organization (PEO) to help you wind your way through the bureaucratese. You will save an immense amount of time, money and aggravation.

PEOs are experts in all aspects of human capital management but bring exceptional expertise to the implementation of employee benefits. Not only are they experts in the administration and monitoring of this crucial arena but they can also use their superior bargaining power to provide greater benefits to your employees at a lower cost to you.

The Future of HCM?

Carolyn Sokol — Thu, 18 Apr 2013 17:45:00 GMT

The recent ratification and implementation of the Patient Protection and Affordable Care Act (PPACA) is just one of the many challenges that now face the human capital management personnel of any company. In this business environment, small business owners must reevaluate the need for an in-house HR solution and look for more innovative ways to meet their human capital and talent management needs.

What Was the Traditional Role of an HR Administrator?
Whether you title them a generalist, a manager, or a director, all of the traditional HR oversight positions fulfilled a similar basic role; managing and facilitating certain aspects of the human capital management process for an organization. These roles, depending on the size of the company, could often involve overlapping responsibilities that would become more distinct and clearly defined as the company grew but always their main focus was clear; facilitate the interactions between company employees, management and the government.

This highly fluid interactivity put HR administrators in a somewhat awkward position. While they were ostensibly employed by the company, they were also tasked with being advocates for their real “customers”, the employees of the company. It took a superior HR professional to perform the delicate balancing act necessary to successfully meet both needs.

The New, Evolving Role of HCM Administrators
While many HCM managers still perceive their roles as described above, more forward minded professionals recognize that the role of the HR professional must change to more accurately accommodate the needs of today's modern and rapidly changing organizations. The days of the HR department being simple accountants and administrators are at an end.

To gain the most benefit from of your employees and to provide them with the best opportunities, a more balanced and comprehensive approach is needed. Human Resource Information Systems (HRIS) and outside contractors like Professional Employer Organizations (PEOs) that can help a company systematically hire, retain, motivate and properly deploy their employees must be utilized. Simply put, HR administration is no longer enough. Talent management is now the future of HCM.

Did the Boss Just Make a Pass at Me?

Carolyn Sokol — Fri, 12 Apr 2013 12:39:00 GMT

People who work closely together may sometimes develop a false sense of familiarity, which can lead to one co-worker making unwanted advances toward another.

When the person making the advance is your boss, you may feel like you're in a no-win situation. With that in mind, here are some tips on how to handle it:

The Problem

Both women and men can find themselves the target of unwanted advances by managers or bosses. Unfortunately, even though your boss may not mean any harm by asking you out, his position can make it uncomfortable to turn him down.

Your first instinct may be to go to HR, but if this is the first time he or she has done it, consider trying to handle it on your own first. Right or wrong, a complaint to HR may mark you as a troublemaker, which can lead to hostility from other managers or even your co-workers.

An Ounce of Prevention

You may be able to prevent unwanted advances before they happen by presenting a serious, focused image at work. Always wear professional attire, and don't engage in sexually suggestive joking with co-workers or management.

This is not to say it's ever your fault if you're sexually harassed, but making it clear you're there to work can help cut down on the possibility. Even the most focused worker can earn unwanted attention from a superior. In that case, it's time to be proactive.

Defusing the Situation

The first thing you should do is make it clear that your boss's advance is unwelcome. Be gentle, but firm with your rebuff. If your boss seems understanding and backs off, you can save both of you a trip to HR.

Make sure you remain respectful while telling your superior you're not interested. While the stressful nature of the situation may tempt you to be harsh, this can lead to hostility, which will eventually require HR or legal intervention.

Respectful ways to turn down an advance include, "I'm sorry, but I have a standing policy to never get involved with someone from work" or, "I want to keep our relationship professional."

If All Else Fails

If you've politely turned down your boss's advances, and he or she continues pressing for a personal relationship, you may have no other choice but to report the incidents.

If your complaint to the company's HR department falls on deaf ears, you may need to escalate your claim to the Equal Employment Opportunity Commission.

Finally, the EEOC will determine whether it will prosecute the case on your behalf or, more likely, will send you a "right-to-sue" letter that allows you to hire a lawyer and take the case to court.

Unwanted attention from your boss may be as simple as a misunderstanding, but if you don't make your feelings clear, it can turn into a far bigger problem. Take quick action to turn down these advances so they don't develop into ongoing sexual harassment.

Professional Employer Organizations

PEO companies are well versed in HR policy and are a great resource in all things HR. They will make sure the right course of action is chosen and will offer wise counsel to help eliminate the threat of legal action as well as eliminate the unwanted advances from the supervisor.

This post was provided by Angie Mansfield who writes on a variety of business topics, you can view her latest post here on how to remove information from public records.

Could I Find Myself the Center of a Lawsuit?

Carolyn Sokol — Fri, 05 Apr 2013 10:55:00 GMT

At the end of the day, most employees just want to do their jobs.

While the majority will never consider filing a lawsuit against their employer, the Jury Verdicts Research 2007 edition of "Employment Practices Liability, Jury Award Trends, and Statistics" stated that the number of employee lawsuits has risen more than 400% over the past 20 years.

Of those lawsuits, more than 41% were against small to mid-sized private employers -- those who have 15 to 100 workers.

Why Employees Sue

Many times, employees sue their bosses for emotional, rather than legal complaints. An employee whose discipline or firing is handled poorly is far more likely to sue than one who is treated with respect.

On that same note, many employee lawsuits arise from the worker feeling mistreated. If she feels that you consistently ignore or downplay her concerns, or feels that you disrespect her, she may decide that the only way she'll be heard is to sue.

A person may also sue because the employer doesn't make expectations clear from the beginning of employment. Confusion over hours, pay, or job duties can lead the employee to feel like you're taking advantage of or exploiting him when these factors end up different than he was expecting.

How to Protect Yourself

Good communication and a respectful work environment go a long way toward preventing an employee from pursuing legal action.

Make sure all of your new hire and training materials deliver clear, direct expectations for job duties, hours, pay, and benefits. They should also make it clear what actions will lead to disciplinary procedures, up to and including termination.

React immediately to any disrespect or abusive behavior in the workplace -- whether it's on the part of a manager or an employee. Respond to employee complaints and concerns with respectful, honest feedback - and then follow up on them.

How to Terminate an Employee without Being Sued

Know the law on employee termination -- and make sure you're following it. Make your reasoning for the termination crystal clear -- this leaves no room for the employee to imagine you're firing her on the basis of age or gender.

Be diligent with documentation. Keep careful notes about all warnings given to an employee, whether written or verbal, as well as records on employee performance and absences.

Put a plan in place that clearly defines your termination procedure. This plan should include your documentation, an outline for termination meetings that includes a list of who will be present, and policies for allowing the fired employee to retrieve personal belongings from his locker or workspace. It's a good idea to consult a PEO company or an employment attorney to help define this plan.

You can also consider purchasing employee lawsuit insurance to protect you and help recover legal fees in case someone does sue.

Finally, working with a professional employer organization (PEO) can be instrumental in providing you with up to date information tied to policies and best practices thereby reducing the legal risks you face as a business owner.

Guest post provided by Angie Mansfield. Angie writes on a variety of business topics, including the essentials of small business management.

Let a PEO Objectively Hire the Best Talent

Carolyn Sokol — Thu, 28 Mar 2013 12:42:00 GMT

Recruiting and hiring the best talent is a tedious and time-consuming task. In addition, it is often fraught with contention and unpleasant realities. Struggling managers, stressed with day-to-day operational responsibilities may give short attention to this important task. They may overlook an excellent candidate when pressed for time or even hire a substandard candidate out of dire necessity. No one is immune to the pressures of their job and it is inevitable that sometimes they will make a bad hiring decision.

Resolving this problem situation is not as difficult as it seems. The use of a Professional Employer Organization (PEO) can relieve much of the stress involved in the hiring decisions. Focused on hiring and other HR priorities, a PEO has the expertise, experience and resources to hire the very best people for your business.

Most importantly, a PEO stands outside the framework of your business allowing then to more objectively evaluate a potential employee. The staff of a PEO is not worried about the next few hours, days or weeks. Instead they are focused on the long term needs of you, your managers and your company. If you are having trouble finding the right candidates for your business, consider a PEO to help you in your hiring process and for all your other human capital needs.

Do My Workers Really Understand the Employee Manual?

Carolyn Sokol — Thu, 21 Mar 2013 17:57:00 GMT

Does your company have an employee manual?

If so, how can you be sure that your employees understand it and follow the regulations you have worked so hard to create?

Not all manuals are based on the things that an employer 'creates', many of the rules and regulations are based on state or federal rules. It is important for all employees to understand the things that are written in their manual, not only to stay within regulations, but to perform their jobs correctly.

Set the Example You Want Your Employees to Follow

If you are not following the rules in your own manual, such as adhering to the time tracking system rules, your employees will wonder why they must.

While it is tempting as an employer to say, “Because I am in charge”, when you set an example, employees will follow. For bad or good, this is true in most instances. No employee will respect an employer that cannot follow his or her own employee manual.

Some key facts to include in an employee manual:

Dress code
Time tracking use
Sexual harassment
Sick time
Material data safety information
Conduct
Discipline

All of the above points, plus any other important information that affects employee performance, should be included in depth. The employer can write manuals, though it is advisable to have a professional writer or PEO company complete the handbook. A professional will include the standard items in most handbooks and can format an employer written handbook to make it easier to understand.

One of the most important items to cover in an employee manual is time tracking.

This includes how to clock in, out, and what to do if the employee is unable to make it in to work. If an employee does not understand how to do the basic items listed above, they are not going to be able to understand their position and what it entails.

For the employer that is just starting out and hiring employees for the first time, read through your manual.

If you are unable to understand it, your employees will not. Give the manual to a family member or friend that is not intimate with the way you think. If they can understand the manual, you may have a clearly written book that will be indispensable to your employees.

Always know your handbook. If your employees cannot come to you for immediate clarification, then you need to read your own manual again. Know it by heart and know the procedures you expect your employees to understand. If you cannot do this, then your employees cannot be expected to understand their function.

If an employee signs a paper indicating they understand the manual, yet breaks regulations often, the employee can and should be fired.

A signed contract indicating their understanding and pledge to follow the manual is legally binding in many states. The handbook is often the legal responsibility of the owner or employer to provide.

If such a handbook is not provided, employees cannot follow rules or regulations. If federal or state laws need to be clarified to employees, not providing a manual can lead to a lawsuit on behalf of the employees, state, or federal agency.

For assistance, companies should consider utilizing their Professional Employer Organization, as they can aid you in creating and/or editing a handbook of quality and can reduce the many legal risks involved if policies aren’t stated using correct terminology.

Please refer to the 5 Fundamentals of a Well-Drafted Employment Handbook for more detailed information.

Tina Samuels contributed to this post, she writes on various small business topics such as time tracking and making the right hires.

The Small Business Efficiency Act Grants Significant Relief to Business Owners

Carolyn Sokol — Fri, 15 Mar 2013 12:32:00 GMT

Small business leaders and their constituents breathed a collective sigh as it was announced last week that the Small Business Efficiency Act was introduced into Congress. The bill is intended to regulate Professional Employer Organizations (PEOs) so that they can expand the role they can play in administering small and medium sized businesses.

Specifically, the bill will remove certain uncertainties as to the standing of PEOs in the federal tax code and also create a voluntary certification program for the PEOs. Effectively, these changes will expand the roles that PEOs can play in the payroll and tax compliance activities of their clients.

Professional Employer Organizations provide a range of services including payroll processing, benefits administration and compliance services. They bring a wealth of experience and expertise to the HR administration of the companies they represent. In addition, using the combined buying power of their clients, they are also able to obtain a superior set of health benefits for the employees entrusted to their care.

Furthermore, PEOs have banded together in the National Association of Professional Employer Organizations (NAPEO) to further the ends, not only of themselves, but of all small businesses in the United States. In fact, NAPEO solidly supported the efforts of Senators Chuck Grassley (R-IA) and Bill Nelson (D-FL who were the key legislators behind the introduction of the Small Business Efficiency Act (S.479).

It is more than a relief to finally see government and business owners seeing eye to eye on a problem that has plagued small business for years, it is a fundamental shift in attitude that business owners and PEOs hope will foreshadow a better, more cooperative business climate in the U.S.

Should You Outsource Your HR Needs?

Carolyn Sokol — Tue, 12 Mar 2013 14:57:00 GMT

When you are faced with basic human resource functions, you may feel in control or you may feel overwhelmed. If you hate the job, you may wonder about outsourcing the work.

There are both good and bad aspects of HR outsourcing, no matter what size your company is. It can mean the difference between employees lacking trust to the company running less efficiently. Which do you choose?

The Advantages of Outsourcing HR Functions

There are many solid advantages of outsourcing your human resource functions to an outside company. Some of these include:

Savings with Recruiting - Instead of paying HR year-round to recruit and interview when the business needs it, outsourcing means you only pay when you are actively hiring. This can be a great cost-savings.

It is More Efficient - Outsourcing human resource management items are more efficient than keeping them in-house. With outsourcing, the business can focus on other aspects of the company, and let someone who has expertise in HR deal with those issues. The price that is saved by outsourcing can also go into more inventory or better equipment for the business.

It Saves Time - When you outsource your human resource management to a company that specializes in that, you don’t have to guess at what you need. They have already done all the research and know HR in and out. They know what to do and when to do it. With outsourcing, there is no trial-and-error on the part of the business.

The Disadvantages of Outsourcing HR Functions

There are also good reasons to keep your human resource functions in-house and with your own team. These include:

In-House Knows Your Company - An HR team that is in-house knows how change will affect the company, where as an outsourcing HR team may not know the operational process of your business. This knowledge will help a company flow better without as many disruptions.

There is the Trust Issue - In-House HR teams may make the employees of your company feel more at ease than outsourcing HR teams. Employees that are made to deal with people who aren't in the company may begin to view it as a "them against us" philosophy. Although, there are situations where employees may appreciate the outsourced HR team rather than the in-house HR person.

It Isn't a One-Size-Fits-All Approach - While outsourcing HR puts it in the hands of the professionals, that doesn't mean that what typically works well for others will work well for your specific company. Hiring an HR crew can mean you have people who know your company, your employees, and what subtle nuances it needs manipulated.

By weighing both the good and the bad of HR outsourcing you can make an informed decision about the direction your company should go.

A company's needs and focus often times change, meaning their human resource management shouldn’t be afraid to change as well.

Guest Author: Tina Samuels writes on many small business topics and for a variety of websites, including Reputation.com.

The Rise of Union Sponsored Healthcare

Carolyn Sokol — Wed, 06 Mar 2013 14:53:00 GMT

An unusual phenomenon has taken place over the last few years in the American healthcare industry; the reappearance of union sponsored healthcare plans. The non-profit organizations were once the sole sponsors of healthcare for workers in the U.S. but were eventually supplanted by superior employer backed plans.

The recent reelection of President Obama’s administration has breathed new life into this old, but dependable healthcare model. With many companies planning to abandon their health care coverage in the face of the new fees that the PPACA will bring, a few intrepid “employee” organizations have stepped up to form healthcare alliances for their members.

These non-profit groups use the power of numbers to negotiate better services and premiums for their members and, in one particular case, have built their own healthcare clinic to care for its members. While the concept is not new in the traditional sense, it is somewhat revolutionary for the 21st century. Read more about the Freelancers Insurance Company and its clinic here, The Wave of the Future – PPACA and America’s Health Care.

3 Things to Consider when Managing the PPACA

Carolyn Sokol — Mon, 25 Feb 2013 18:51:00 GMT

I - New Hires

The recently enacted PPACA mandates a range of new requirements that start with the new hires. As of January 1, 2013, new employees must receive an up to date “New Plan Summary” during their orientation, they must be automatically enrolled in the current company healthcare plan and the employer is responsible for reporting the aggregate value of this benefit on their W-2.

Employers should be especially careful to comply with these seemingly routine procedures as the government is decidedly serious about seeing them implemented in a timely manner and has the power to assess significant fines in the event of non-compliance.

II – Coverage Considerations

Intended to provide coverage for every American citizen, the PPACA is a well-intentioned, if somewhat misguided, experiment. Have no doubt. It is an experiment and no one knows where it will ultimately lead.

Many companies, especially small businesses, are actively investigating the best way to deal with this new act. This fact does not always mean that employees end up under a qualifying health care plan. Instead, companies may opt to pay not only their own fine but also the one levied on employees who never obtain healthcare coverage.

This situation may seem a little like Russian roulette as employees will not be covered if they contract a life-threatening illness. However, there exists a specific provision in the PPACA that eliminates this problem. Insurance plans are no longer allowed to deny coverage based on pre-existing conditions. In addition, the insurers will be required to offer the coverage at the same price for all in the same demographic group. In short, many people will simply pay the penalties and then only obtain coverage when it is absolutely needed.

III - Fairness and the PPACA

The appearance of fairness is absolutely essential to the proponents of the PPACA. Interestingly however, the very rich along with the members of Congress will be exempted from the requirements, everyone else, ideally, should be dealt with in an equal manner by the Act.

To this end, the PPACA requires that no one be denied coverage due to a pre-existing condition, that insurance premiums are similar for the same demographic groups and that no particular group is unduly favored. These criteria will be ensured by the application of non-discrimination tests administered by the government.

Fairness is an unusually subjective topic and business owners would do well to meet this challenge by understanding and complying with the new provisions of the PPACA. For more in-depth information about this topic, please read our article, “Healthcare Reform Considerations for 2013.”

Why are ADP TotalSource and Insperity not on PEOcompare.com?

Carolyn Sokol — Tue, 19 Feb 2013 18:13:00 GMT

We have 19 of the industry’s top PEO companies listed on PEOcompare.com. I believe we offer a great mix of PEOs offering solutions for every business's state, industry and company size.

There are a handful of additional PEO companies however, that we are looking at actively adding to the site. These additional vendors represent well-known names in the PEO industry. Our visitors are eager to compare these professional employer organizations with the other HR outsourcing firms on the market. In fact, I’m frequently asked by our visitors why these vendors aren’t on PEOcompare.

Sometimes their clients access our site looking to compare the services they are receiving and yet their offerings are still not listed.

So, if these vendors are so important, why are they not on the site? The truth is they just won’t return my phone call. Seriously, I wish I could tell you something more exciting but that’s it. Being a creative gal I have tried other approaches. I have tried to contact them using Linkedin.com, I’ve talked to sales reps and brokers for those companies and I’ve sent emails. I traveled all the way to Texas from Tampa for the NAPEO convention to meet these guys face to face. I got cards but no returned calls when I got back.

Now I’m calling them out with the blog. ADP and Insperity call me.

My visitors and I would like to see you guys on the site. For me, for them and for all of humanity, join us.

My number is 727-940-3786 or you can email me at c.stoll@PEOcompare.com.

Getting Started with a PEO

Carolyn Sokol — Fri, 15 Feb 2013 20:58:00 GMT

The whole point of using a Professional Employer Organization is to relieve you of the drudgery and hassle of dealing with payroll and other human capital management issues. So, why would a PEO make the enrollment process a hassle in itself? The answer is, “They wouldn’t.”

Finding the right PEO for your small business should and will take some time and effort. Once you have made the decision though, the enrollment process or switching providers is actually quite simple.
Start Ups
New companies are the easiest to enroll as they have learned no “bad habits” when it comes to their payroll. In addition, there are no previous business relationships to disentangle. The bottom line is that a new business really only needs five pieces of information to get started with a PEO:

The business name including DBAs and a business description
Estimated payroll expense itemized by location and employee position
Tax ID number
An actual employee census
A copy of the business plan

Existing Businesses without a Previous PEO relationship
Existing businesses have history and as such will have to provide some of it to allow the PEO to get up to speed on the company’s HR activities. Still, these half dozen, readily available pieces of information will get your existing business started with a PEO:

Tax ID number and corporate status
A copy of the most recent payroll run with worker’s compensation codes for each employee
A current employee census
Copy of the current healthcare plan and worker status including the Declaration page
Most recent, quarterly State Unemployment Tax Act rating
Worker’s comp “loss runs” for the last three years

Businesses Currently Using a PEO
It might seem that switching providers would be the most problematic case but, in actuality, it is the simplest. The fact that your company has already been doing business with a PEO has consolidated much of the information needed by the new provider. Only these four pieces of information are usually necessary to switch from one PEO to another:

Tax ID number and corporate status
An invoice from the current PEO
A signed Loss Affidavit or worker’s comp “loss runs” for the last three years
Copy of the current healthcare plan and worker status including the Declaration page

Why Are You Waiting?
PEOs offer an excellent option for small businesses. Not only can they handle the day to day aspects of payroll, they can also help with all other aspects of your company’s human capital management from hiring through training to firing. In addition, they offer a wealth of information and experience in regards to the more complicated HR situations such as harassment suits and legal claims. In short, PEOs are a proven and affordable way for any small business to manage its human resource needs.

HR Outsourcing and the Small Business Efficiency Act (SBEA)

Carolyn Sokol — Mon, 11 Feb 2013 19:12:00 GMT

It should go without saying that small businesses specifically outsource many of their HR functions so that they won’t have to deal with them. Unfortunately, the United States government does not always see eye to eye with small business owners. A case in point is the withholding and remitting of payroll taxes by third party HR services companies.

PEOs and the SBEA

One of the most burdensome tasks for an HR department is the administration of payroll and the attendant taxes. There is a plethora of regulations and eccentric minutiae that makes the process burdensome and tedious. For this reason, companies, large and small, turn to outside experts like Professional Employer Organizations (PEOs) to do the “dirty” work properly.

Unfortunately, as of January, 2012, the laws regarding the acceptability of PEOs to collect and remit Federal payroll taxes for their clients remain unclear. The SBEA, which has been submitted to both the House and the Senate and enjoys bipartisan support, aims to rectify this lamentable situation by codifying the co-employment model espoused by PEOs and their small business clients.

The benefits of the SBEA are evident and wide ranging. In the plainest terms, enactment of the SBEA will allow companies to concentrate on their core competencies and allow their HR vendors to completely fulfill the administrative tasks involved with payroll. In addition, the I.R.S, itself would see its burden lessened by the use of certified PEOs that would more accurately collect and remit employee payroll taxes.

What’s Next for the SBEA?

It is truly uncommon for a bill to equally benefit both the government and small business. The Small Business Efficiency Act of 2011 (H.R. 2466/S. 1908) is one of these rarities. As of now (1/13), the bill sits in committee. With any luck, both houses of the U.S. Congress will recognize the importance of clarifying this issue and act quickly to pass the bill. President Obama can then do the right thing by signing this bill into law.

Telecommuters are the New Workforce

Carolyn Sokol — Fri, 01 Feb 2013 15:20:00 GMT

First the Baby Boomers, then Gen X and now to the “Millennial” generation; humans just love to categorize things, don’t they? While these different groups are probably more alike than dissimilar, they each have had distinctive aspirations and expectations about their work life.

The Baby Boomers wanted lifelong security and the Gen Xers just seemed content with “Casual Friday.” Gen Y, the “Millenials,” however, want a little more; non-traditional jobs that leverage the technological excitement of computers and the Internet. Integral to this expectation is the ability to telecommute.

Telecommuting offers some obvious benefits to the employee. Still, since the company is paying the freight, the benefits must necessarily also accrue to them. A considered look at telecommuters and their management does, indeed, reveal some significant benefits to the company. In addition to reduced administrative and infrastructure costs, a company will usually see increased productivity, lower turnover and improved employee engagement.

The flip side is that telecommuters require a considerable amount of performance management. The usual feedback is not available and small business owners and their managers must be proactive in providing performance reviews, counseling statements and terminating those who do not perform to expectations.

Management Solutions

This amount of performance management is a tall order for a small company without any expert assistance. In many cases, without the guidance of a PEO or other third party service company, HR issues can be brushed aside for seemingly “more important” matters. Unfortunately, this can be a recipe for disaster as it only takes one harassment or discrimination case to bankrupt a small business.

For more on the challenges of managing a telecommuting workforce, check out our article, Don’t Drive Your Telecommuting Talent Away.

Top 3 Things Small Businesses Should Know About the Affordable Care Act

Carolyn Sokol — Tue, 29 Jan 2013 21:07:00 GMT

Note: This post was originally published on SBA.gov blog.

The Affordable Care Act will help small businesses by lowering premium cost growth and increasing access to quality, affordable health insurance. Depending on whether you’re a small employer or a larger employer, different provisions of the Affordable Care Act may apply to you as described below.

1. Businesses with Fewer than 25 Employees- Small Business Tax Credits

The Affordable Care Act does not require that businesses provide health insurance, but it offers tax credits for eligible small businesses that choose to provide insurance to their employees. To qualify for a small business tax credit of up to 35% (up to 25% for non-profits), you must have:

Fewer than 25 full-time equivalent employees
Pay average annual wages below $50,000
Contribute 50% or more toward employee health insurance premiums

Beginning in 2014, this tax credit goes up to 50% (35% for non-profits) and is available to qualified small businesses who participate in the Small Business Health Options Program (SHOP) Exchanges.

2. Businesses with 50 or Fewer Employees- Affordable Insurance Marketplaces

The Affordable Care Act does not require that businesses provide health insurance, but beginning in 2014, small businesses with generally 50 or fewer employees will be able to purchase coverage through SHOP , competitive marketplaces where small employers can go to find health coverage from a selection of providers. The SHOP Marketplaces and Individual Marketplaces for those who are self-employed open on January 1, 2014. Open enrollment begins on October 1, 2013. SHOP will offer small businesses increased purchasing power similar to that of large businesses.

3. Businesses with 50 or More Employees- Employer Shared Responsibility Provisions

Under the Affordable Care Act, the Federal government, State governments, insurers, employers, and individuals share the responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. Employers are not required to provide coverage to their employees under the Affordable Care Act. However, beginning in 2014, businesses with 50 or more full-time employees (or full-time equivalents) that do not offer affordable health insurance that provides a minimum level of coverage to substantially all of their full-time employees (and their dependents) may be subject to an employer shared responsibility payment if at least one of their full-time employees receives a premium tax credit to purchase coverage in an insurance Marketplace. A full-time employee is generally one who is employed an average of 30 or more hours per week.

A Professional Employer Organization can help you understand how these rules may apply to you and how the employer shared responsibility payments could be triggered.

Hiring the Overqualified

Carolyn Sokol — Fri, 25 Jan 2013 17:32:00 GMT

The ongoing economic malaise does not bode well for the unemployed workers in the United States. Millions of excellently qualified job seekers are flooding the job market. This situation creates a seemingly ideal opportunity for businesses to hire well or over-qualified candidates for positions in their company at a seeming discount.

While it is true that many of these applicants will take any job offered to them regardless the terms, a prudent business owner should consider the long term ramifications of hiring an overqualified applicant on less than equitable standing.

An Overabundance of Talent

Every serious watcher of the labor markets recognizes that there is an unprecedented availability of top talent in the marketplace. Conventional wisdom has always recommended the avoidance of overqualified job applicants for several reasons; lack of engagement, effects on morale and, most importantly, the increased likelihood of rapid turnover.

These defects, whether real or not, are important considerations before introducing a well-intentioned but otherwise unsatisfactory employee into your workplace. Assuming that the candidate has the required abilities and competency to perform the duties of the position, an owner or executive should also consider the effects on the rest of their staff.

The Risks of the Overqualified

Certain long-term employees may feel slighted that a new hire has been given a coveted position. If the position is one of responsibility, other employees may feel their jobs are at risk. Still others will engage in unnecessary “pushback” due to simple human nature.

On the managerial level, the person’s immediate supervisor may feel threatened with a resultant loss of morale and productivity. While hiring an overqualified person will undoubtedly solve one problem, it may create several more to take its place.

The Rewards of Expertise

An “overqualified” employee will bring a wealth of experience and expertise with them. However, it is up to the owner or executive to make use of these skills as they may not be applicable in the current position.

Expanding the responsibilities of the position or creating an entirely new one are certainly excellent ways to capitalize on the expertise of an overqualified employee. Still, the implementation of these options will probably require the dedication of more resources in terms of pay and/or staff.

In the simplest terms, the successful and affordable use of an overqualified employee requires some thoughtful decision-making on the part of a small business owner. Finding the right one can help your business attain greater productivity and significantly increase the top line. However, there is no point in pursuing this course of action if the costs do not trickle down to the bottom line. In short, it would be nice to have the expertise but do those rewards outweigh the potential risks?

A Superior Solution

The use of third party vendors and their expert staffs has become the de facto standard for companies when it comes to technology and computer infrastructure. This same mindset, however, can also be applied to many other business functions. In particular, the delegation of human capital management to Professional Employer Organizations (PEOs) has gained steady acceptance in the last few years.

PEOs offer a wealth of HR experience and knowledge. They are well versed in the fundamentals of HR administration such as payroll, hiring, training and, of course, firing.

In addition, these companies remain thoroughly knowledgeable about the latest in government workplace regulations and any recent employment litigation that may affect your business. In short, a PEO offers an entire staff of “overqualified” HR administrators at an affordable cost.

What To Do?

Carolyn Sokol — Mon, 21 Jan 2013 18:11:00 GMT

The new Patient Protection and Affordable Care Act (PPACA) expands an already ungainly, arbitrary and almost completely subjective set of laws and mandates that regulate the employee/employer relationship in regards to healthcare benefits.

Many small businesses are justifiably alarmed at the fines and penalties that can be levied on them when a single employee moves from private healthcare into a subsidized class. This movement can be triggered from something as simple as the addition of a new baby or the relocation as the result of malfeasance on the employee’s part when filing their yearly income tax return. In any case, the law establishes an adversarial relationship between a company and its employees over a purported “benefit.” It is a situation devoutly to be avoided but it cannot as it is not the law of the land.

The PPACA has noble goals but does not really address the practical ramifications for all those involved. Businesses, that for years had provided valuable and sufficient healthcare benefits for their employees, must now spend enormous resources reinvestigating this issue and, quite possibly, eliminating the benefit altogether. In short, for a bill that directly affects every American business and resident, the PPACA has been hastily crafted and enacted over the vigorous objections of those who will have to pay for it.

You Can Pay Me Now or You Can Pay Me Later

Carolyn Sokol — Thu, 17 Jan 2013 12:00:00 GMT

It’s funny what you run across on the internet these days. The more things change the more they stay the same. For me, this sentiment was reinforced when I saw an old FRAM oil filter commercial. The commercial simply sold a new oil filter as a way to prolong the life of your motor and avoid costly engine repairs in the future. It was a solidly conceived idea and conveyed a very basic but important message: pay attention to the routine things now or pay a major price for your ignorance later.

On its most basic level, the point of the commercial was that without the proper care and preparation, an engine will succumb to deterioration and failure if not properly cared for. The commercial, however, held a deeper meaning for anyone who has run their own business; woe to the business person who does not take care of the little things before they become the big things.

Nostalgia aside, the message of that commercial is clear to me. A small business will pay its dues in one way or another. The goal of the owner is to limit those dues by making thoughtful and prudent decisions that limit his operating costs and his exposure to costs outside his area of control. In short, though it hurts, the prudent businessman must make investments that will limit his overall costs and allow for the greatest profitability in his company.

Utilizing a Professional Employer Organization for your HR administration ensures that the little things never become the big ones.

The commercial I referenced was made in 1981. Not only are FRAM oil and air filters still available, they are regarded as one of the standards in the automotive industry. It just goes to show that you should be proactive in everything that you do.

Your Company and the PPACA

Carolyn Sokol — Mon, 14 Jan 2013 12:00:00 GMT

The recent reelection of President Obama bodes well for the continued institution and expansion of the Patient Protection and Affordable Care Act (PPACA). While Republicans may talk tough, the President has no real incentive to compromise on any of the scheduled reforms that will be implemented in this term.

The State of Your Company
The ramifications for your company are, indeed, significant. All hyperbole aside, the simplest result is that companies under “Obama Care” are going to pay more for less. This situation is likely to hit most companies in a similar manner. Whether it will negatively impact their employee morale and, in turn, productivity is a matter that does not concern the current administration.

Companies are now struggling to decide the pros and cons of keeping an in-house healthcare benefit program in place or to eliminate in favor of the PPACA. It is a deeply disturbing consideration as potential employees will certainly “vote with their feet” when it comes time to decide between a company with “free” government health benefits and one provided by a private insurer. Most employees will not recognize that most of the cost of the government plan will be deducted from their own paycheck while private companies will, at least, absorb some of the cost.

The Future of Privately Funded Health Care Insurance
There are stirrings in the water as some states have indicated that they will take advantage of the recent Supreme Court ruling and opt out of the PPACA. While this situation looks promising, it seems likely that he Federal government will enact some other pressures to make this “opt out” plan less feasible. Right now, the main emphasis is to push as many people as possible onto government subsidized health plans.

All private companies, except those specifically exempted by the legislation, will have to formulate a plan that meets government criteria by January, 2014. Otherwise, they will just pay fines and send their employees out to find coverage on their own. The real problem is that no one in government or in the private sector can foretell what kind of coverage those employees will be able to afford.

PEOs and More Affordable Healthcare
One of the possible lights at the end of the tunnel for small companies looking to solve their healthcare and PPACA issue is a Professional Employer Organization (PEO). These companies have been helping businesses meet their HR needs for decades and for the foreseeable future, PEOs offer some significant advantages to small businesses in this situation.

PEOs can help small business that are struggling with their healthcare befits programs in three distinct ways. First, they bring lower payments to the table as an immediate benefit. Since they represent a wide range of clients with a large number of employees, they can negotiate better payment terms for their clients. Similarly, this extra buying power allows them to offer a broader range of options to the employees of their clients. In many cases, these broader plans can actually satisfy the demands of the new PPACA.

On a related note, PEOs also can help to more efficiently manage a company’s healthcare plan. By facilitating the employer/provider interactions, a PEO can actually lower a company’s costs year after year. Finally, a PEO can institute and maintain a wellness program that further reduces the healthcare needs of a company’s employees. This action translates into some seriously significant savings to the company.

No One Can Tell the Future
While anything can happen, the prudent course of action is to prepare for the future and the future of American healthcare appears to be the PPACA. One can hope for the best but it is only wise to plan for the worst. In this case, an examination of the benefits that a PEO brings to the table is one of the most prudent moves that a small business owner can make.

"Human Capital Management," A New Buzzword - The Same Story

Carolyn Sokol — Mon, 07 Jan 2013 12:45:00 GMT

The latest term for the business of managing human resources is “Human Capital Management.” The term has a decidedly impersonal feel for an activity with such considerable human interactivity and consequences. Still, it does recognize the considerable value that employees contribute to a business.

The term has gained significant usage in the past few months and should, at the very least, be recognized by all human resource professionals. While companies have physical assets, build “good will” and have literal financial capital, their employees are probably their single greatest source of “capital” in their inventory. As such, the proper and efficient use of this capital is of preeminent importance to every business.

While Human Capital Management involves the acquisition, utilization and maximization of human capital, the everyday terms used to accomplish these goals are couched in more sensitive terms. Employees are hired not acquired and they are trained rather than maximized. Whatever the lexicon, the goal is to obtain the best results with the minimum cost.

For these reasons, savvy business owners and executives have increasingly turned to automated processes and third-party vendors to more efficiently run their Human Capital Management. The advent of web-enabled Human Resource Information Systems as well as experienced Professional Employer Organizations bode well for the companies that want to maximize their human capital as well their financial and physical ones.

Resources for the Small Business Owner in Searching for a PEO

Carolyn Sokol — Thu, 03 Jan 2013 12:52:00 GMT

Despite our President’s recent contention that business owners have not built their businesses by themselves, the vast majority of start-ups and small businesses are incredibly dependent on the efforts, resources and smarts of their owners. While the average entrepreneur will have an excellent understanding of his concept or of his product, he may not know so much about the day to day running of a business. Fortunately, there resources that can help him with this problem.

Professional employer organizations (PEOs) offer a wide variety of services from recruiting through payroll administration to health care administration. While PEOs offer some definite advantages to the small business owner, finding the right one entails some serious consideration and planning. A great place to start your search is at PEOcompare.com. The resources on this site detail various PEOs and the services they offer. It is an ideal place to find a PEO that exactly provides the services that your company needs.

Another alternative is the use of a PEO broker. These companies are, by and large, very reputable. Nevertheless, due to their compensation agreements with various PEOs, they have a vested interest in making the needs of the end-users, who come to them for guidance, fit the services of their real clients, the PEOs. There is no real problem with this if the buyer is aware of the actual business relationship.

Whether you choose to manage HR in-house, use a resource like PEOcompare.com or hire a PEO broker, it is essential to identify your needs and plan properly before you spend any dollars. Resources are typically tight in a start-up and additional expenses may not seem like the right way to go but a prudent investment in HR management will allow you to focus on your business and could mean the difference between success and failure.

Music in the Workplace - To Play or not to Play?

Carolyn Sokol — Thu, 13 Dec 2012 09:18:00 GMT

Music hath charms to soothe the savage beast. That statement may be true but it opens up some interesting questions about the workspace.

Does the soothing effect of music have a place in the work environment?
Is the beneficial or distracting?
Are any positive effects outweighed by petty squabbling over the choice of music?
How does an office manager make a fair decision about the choice and selection of music?

Retailers have found music to be a desirable alternative to silence but retailers also intermix commercial spots so there motivations are not exactly the same as an office manager. The decision to provide music or not is actually quite easy when compared to the one involving the music selection.

Music is a very personnel choice and everyone considers themselves an expert. While there are companies who specialize in providing appropriate music to various venues, it is probably wiser to consult a professional employer organization (PEO) as to the best practices in terms of allowing music in the work space.

Not only can the PEO provide a well-researched choice based on any criteria you name, their broad experience across a variety of industries can provide some objectivity to the process. More importantly, it also lends a degree of authority and impartiality to the choice that can insulate management from the inevitable criticism.

All the reasons for using PEOcompare!

Carolyn Sokol — Sun, 09 Dec 2012 18:49:00 GMT

Love the Koala!