Does Employee Leasing Make Sense For My Business - Insurance - Workers Compensation

Does Employee Leasing Make Sense For My Business?   by Mike Burgelin

in Insurance / Workers Compensation    (submitted 2009-08-06)

As employee leasing, a.k.a. Professional Employer Organizations (PEOs), continue to spread rapidly across the country, the natural question an employer would want answered is - how will these services benefit my business?

To begin with, there are four core services that an employee leasing company provides. Those services are payroll administration, workers' compensation management, group employee benefit plans and human resource management. Many PEOs offer you the opportunity to choose which service(s) you feel would benefit your business- and many times the addition of just one or two of these services provides the impact you were searching for.

Because your business is unique to any other, you'll have a set of priorities that require more attention than others -so single out the services that you're looking to improve on. Let's briefly look at each of the four core employee leasing services and the benefits they may provide to you.

Payroll administration:

1 in 3 businesses pay fines and penalties each and every year for late or inaccurate payroll tax reporting. The PEO assumes responsibility for these tasks and many others as well, including:

*Preparing and distributing payroll checks

*Direct deposit of wages to bank accounts

*Year end W2s and W3s

*Reporting federal, state and local withholding and tax deposits

*Quarterly tax reporting

*Payroll Garnishments

*Response to I-9 inquiries

*Reporting and job costing

*Time clock management

*Vacation and sick leave tracking

*Tax changes administration

Workers' Compensation:

In some industries, workers' compensation insurance can be the most expensive cost in running a business. The right PEO can provide savings (up to 40%) on workers' compensation insurance that the voluntary market cannot. Some of the other benefits include:

*No money down, pay-as-you-go plans

*No yearly state expense fees

*No more frustrating audits

*Management of all legitimate and fraudulent workers' compensation claims

*Help in developing and maintaining a safety plan

*OSHA compliance assistance

*Assistance in reporting and documentation of accidents

*Advice, access and a tailored plan for on-going safety meetings

Employee Benefits:

According to the Small Business Administration, the number one small business issue is the cost and availability of insurance. The frustration for many small business owners is that one large claim can increase the entire group rate- sometimes forcing the cancellation of benefits altogether. Your small group combined with thousands of other lives on the plan can prevent drastic increase. Many PEOs provide access to following benefits:

*Group Major Medical plans

*Dental and Vision plans

*401(k) retirement plans

*Life/Disability Insurance

*Flexible Spending Accounts

*Employee Assistance Programs

*Supplemental Insurance options

Human Resource Management:

According to the Small Business Administration, between 1980 and 2000 the number of labor laws and regulations grew by almost two thirds! Most business owners have never had formal training on hiring and firing procedures, how to perform annual wage reviews or construct an employee handbook. An employee leasing company can assist you with these tasks and provide HR help in other areas, as well:

*Review, draft and communicate employment policies

*Create and publish legally valid employee handbooks

*Employment posters and notices

*Unemployment claims administration

*Background checks

*Audit compliance with Wage and Hour (FLSA)

*Audit compliance with EEOC

*Applicant interviewer training practices

*I-9 compliance

The concept behind employee leasing services is that managing the day-to-day, employee-related tasks of your business takes a tremendous amount of time away from working on income- producing opportunities. All of this work generates zero income for a business owner - so why not outsource it? Call us and see if employee leasing can work for you.


Mike Burgelin is the President and CEO of Employee Leasing and has over ten years of experience in the employee leasing/ PEO industry.