The more time you spend managing employee issues, the less time you have to run your business. But by ignoring your employer responsibilities to employees, you could cause a rift in your workforce and create potentially costly legal battles.
Fortunately, many of these concerns can be alleviated by outsourcing to a Professional Employer Organization (PEO).
Here are seven scenarios where a PEO can come in handy.
1. Your simple employee relations issue just escalated.
You’ve mentioned several times in passing to Joe’s supervisor that Joe seems to be late to work often, and you’ve seen no improvement. Other employees are now complaining that Joe is very careless around equipment in the warehouse. You’re not sure what to do now to correct the situation and keep yourself out of legal hot water.
PEO outsourcing can provide help on how to handle disciplinary situations and take the appropriate steps to correct them, including verbal counseling, coaching and proper written documentation.
But disciplinary issues aren’t the only areas it can help you with. A PEO can help you limit your liability by making sure other employer responsibilities to employees are handled properly, including:
- Safety – From office safety and ergonomics to hazard identification that can reduce exposure and potential loss, the safety team can help you evaluate your current situation and offer practical solutions.
- Workers’ compensation – These specialists will guide you through the process surrounding work-related injuries, including monitoring the claim and assisting injured workers return to work as quickly as possible.
- Equal Employment Opportunity (EEO) – You can receive assistance with charges of discrimination and harassment, including drafting responses to government agencies, gathering the necessary information and deciding how each charge should be handled to minimize your financial risks and business liability.
2. An employee requests leave.
There is a myriad of leaves now available to employees and just as many laws and regulations that surround them. Before you deny a leave or decide this isn’t an issue you’ll ever deal with, you should be aware employees may be entitled to a leave under state or federal law involving:
- Family and medical leave
- Victims of crime leave
- Family military leave
- First responder leave
- Bone marrow donation leave
- Organ donor leave
And these are just a few of the current available leaves of absence, depending on state and federal laws and regulations. Fortunately, PEOs monitor available leaves of absence and the state and federal laws and regulations surrounding them. This increases compliance with applicable law and ensures employees receive what they are entitled.
Nowadays, many states and cities have specific paid sick leave laws in place to watch out. If your business is located in numerous places, a PEO can help you stay up to date on these regulations.
With PEO outsourcing, you’ll have access to a leave specialist who will monitor the length of your employees’ leaves and the status of their return to work. This specialist is particularly valuable if you’re a multi-state employer. A PEO can help navigate multiple state and federal laws and regulations to keep you in compliance in every state where you have employees, helping you keep up with your employer responsibilities to employees.
3. You need to track COBRA elections, eligibility and payments.
As an employer, you’re required to track whether your former employees or employees on an extended leave of absence, are making COBRA payments, to send written notice if payments are late or missed, and to stay informed on how long COBRA coverage continues for affected employees. We’ve found that these types of benefits are especially important for smaller companies.
PEO outsourcing can help manage administration of COBRA benefits for employees who qualify. Moreover, they will help ensure compliance, saving you time, headaches and limiting potential liability.
4. You aren’t sure what background checks are permissible.
How familiar are you with laws and regulations surrounding background checks? Do you know if your state allows use of criminal checks, and for how many years previous to the check? Does your state allow you to look at a candidate’s credit and use that score in determining employability?
It’s common for some employers to pick and choose whose background they check with no rhyme or reason. It’s critical to be doing these in a consistent manner based on the type of position. But which positions? A PEO can help you understand your employer responsibilities to employees.
Also, if you’re moving people internally to a new position, you must know the roles in which people need background checks. For example, if someone is moving from an administrative assistant role to one that handles company cash, a background check should be performed if one wasn’t conducted when the assistant was originally hired.
PEOs usually employ recruiting and employment screening professionals who keep up on the ever-changing industry laws. They can provide you with the guidance you need to make your recruiting and pre-employment screening practices more proficient and cost effective.
5. You’re terminating an employee, and you don’t want to pay vacation hours.
Have you studied your state laws lately? Does your state consider vacation pay to be “wages” that must be paid to an employee upon separation from employment?
Do you know when you must pay an employee who has voluntarily left employment versus when an employee is involuntarily terminated?
Fortunately, your PEO specialist knows what is required in your state and will advise you on what you need to do to avoid potential liability and remain compliant. This may even save you money down the road.
6. Your managers aren’t following company policies or leading effectively.
All the policies you create for your company are for naught if your managers don’t follow them when conducting their daily responsibilities.
Managers are held to a higher standard and considered representatives for your company. They must understand your rationale for policies, their roles in policy administration and the consequences for failure to carry out those roles. Failure to do so creates the possibility of multiple liabilities, from employee complaints and dissatisfaction to lawsuits against your company.
When you work with a PEO, you get access to HR specialists who can help you train supervisors on key policy issues, such as sexual harassment awareness, anti-harassment policies, workplace violence prevention, interviewing techniques, performance appraisal skills, substance abuse prevention and effective employee counseling.
Develop your managers so they have the necessary skills to lead the operation, like engaging and effectively communicating with direct reports. A PEO may offer a learning and performance specialist who can help train, analyze and determine where gaps may exist. Then you can begin to bridge them.
They can also help you develop an employee handbook that outlines company policies and clearly communicates performance expectations.
7. You realize you need to know and understand your workforce.
This is simple. You must know who you’ve employed. Know your personnel.
For example, if you had to lay off staff, it’s important to understand your workforce. Analyze employee demographics and how layoff decisions affect them. Otherwise, you’re setting yourself up for lawsuits. You don’t want to accidentally find yourself in a situation where 90% of your layoff were people over the age of 50.
The solution is pinpointing the business case that justifies your actions and communicating that to the affected employees — before it becomes a misunderstanding.
A PEO can help analyze your workforce, let you know when there could be a problem and walk you through a plan of action. In the end, these decisions are still entirely up to you as the business owner.
Also, knowing your workforce is about assessing the costs of employee turnover. Many times a seemingly necessary termination leaves a void. Working with a PEO, they can assess where there’s opportunities to address those issues without moving forward with any terminations.
This barely scratches the surface of how a PEO can help business owners reduce their HR burden and focus on growing their underlying business. If you’d like to learn more, then download our complimentary e-book: HR outsourcing: A step-by-step guide to professional employer organizations (PEOs).