Engaging a PEO: Avoiding Regulatory Fines and Penalties

All businesses with employees are faced with potential fines and penalties if laws and regulations are not met. Many business owners and managers have minimized or eliminated these risks by working with a PEO.

The following are examples of penalties that could have been avoided by using a Professional Employer Organization.

Failure to provide Worker's Compensation Insurance (in all states where required).

• $1,000 minimum fine
• Immediate "stop work" order.
• $100 per day fine per employee while the "stop work" order is in effect
• 2-3 years unpaid premium penalty

Wage and Hour (Fair Labor Standards Act-FLSA)

• 2 years back pay and double for overtime

Failure to remit FICA Withholding from Employees

• Fines not more than twice the gross gain
• Willful failure, guilty of a felony and upon conviction thereof be fined not more than $10,000 or imprisoned not more than five years or both, together with the costs of prosecution

OSHA

• $5,000-$7,000 fine for each violation
• $250,000-$500,000 fine and up to six months in prison for the death of an employee

COBRA (Consolidated Omnibus Budget Reconciliation Act)

• $100 fine per beneficiary per day for failure to comply with regulations

EEOC Discrimination

• $50,000 for companies with up to 100 employees
• $100,000 for companies with 101 to 200 employees
• $200,000 for companies with 201 to 500 employees
• $300,000 for companies with over 500 employees

Contractor / Employee Misclassification

• Liable for unpaid taxes of contractor. Fines Vary: Microsoft paid $96.8 million.

Child Labor Laws

• $2,500 per violation

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431 12th Street West, Suite 202
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Phone: 941-750-9450 - Fax: 877-471-5608
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