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2/27/2014 OFCCP - Why your small business does not want to be a government contractor

Source: StaffMarket
The US department of Labor has new HR and pay rules for government contractors. It's not pretty.
The political zeal for enforced diversity and now, equal pay in the workplace has spawned a set of hiring guidelines so involved and confusing that no business owner in their right mind should seek to become a government contractor. If you thought figuring out how to comply with ACA was tough, take a look at this guidance from The Department of Labor on:

Interpreting Nondiscrimination Requirements of Executive Order 11246 With Respect to Systemic Compensation Discrimination and Voluntary Guidelines for Self-E valuation of Compensation Practices for Compliance With Nondiscrimination Requirements of Executive Order 11246 With Respect to Systemic Compensation Discrimination.

If the title alone doesn't scare you then take a few days and read the document. Then re-read it. Then think about what your company needs to do to be compliant. Then ask yourself if after doing all those things, you will be able to adequately defend your company from charges of discrimination from any of the new protected classes. Now go stick your head in the oven. Feel's better there doesn't it?
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12/20/2013 Owner destroys business with one stupid move

Source: StaffMarket
Punching out an employee is a bad idea, Especially when you are the owner and need work comp insurance.
At StaffMarket we have reviewed the workers compensation situation for thousands of small businesses across the USA. This week we had a submission from a company hoping to obtain work comp coverage by hiring a Professional Employer Organization. The business has two restaurants in Jacksonville, Florida. The business was seeking some options that provided workers compensation coverage for their employees as required by law. Part of the work comp insurance underwriting process involves insurance carriers reviewing the “loss history” for the company which details the various situations and associated financial costs related to workers’ compensation claims over the last several years.
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9/20/2013 New Study Shows PEO Clients Grow Faster

Source: StaffMarket
New NAPEO study demonstrates that businesses using a PEO have a higher growth rate than those that don't
While the overall environment for small businesses remains challenging, a new study commissioned by the National Association of Professional Employer Organizations (NAPEO) shows that small businesses using a PEO are growing. The increasingly burdensome tasks of meeting tax and regulatory compliance may be a factor hindering small business growth. But, this study shows that businesses who outsource those non-revenue producing compliance tasks to a PEO have reduced both their costs and risks. Those businesses are growing.

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8/30/2013 PEOs get Favorable Ruling on ACA from the Treasury Department

Source: StaffMarket
PEO group health care plans to be treated as employer sponsored plans.
The IRS released final regulations on the requirement that individuals purchase health insurance adheres to the minimum essential coverage standard known as the individual mandate. These rules provided definition to those Professional Employer Organizations - PEOs offering group health plan coverage to employees on behalf of a PEO client employer. Th individual mandate requirement is satisfied by maintaining coverage under an eligible employer-sponsored plan. These new regulations include an eligible employer-sponsored plan offered by a PEO on behalf of a PEO client employer.

Specifically, the definition of eligible employer-sponsored plan in the final regulations (Section 1.5000A-2(c)) provides that an eligible employer-sponsored plan includes, in addition to coverage offered by an employer, (i) group health insurance coverage offered on behalf of an employer to an employee and (ii) a self-insured group health plan under which coverage is offered by, or on behalf of, an employer to the employee.
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8/9/2013 Know your PEO – Preventing Work Comp Fraud

Source: StaffMarket
What business owners should know about PEO Workers' Compensation Certifications
Over the last several years there have been several incidents where business owners have contracted with a PEO to provide workers compensation insurance for their business only to later learn that the PEO did not have a valid workers’ compensation policy in place.

These rare events unfortunately give the entire industry a bad rap. The vast majorities of PEOs provide a valued service and access to insurance products at a competitive price. However, as in all businesses there will be a few bad actors that may financially injure others or commit outright fraud. Remember, insurance is one of the few products people buy where they exchange cold hard cash and in turn receive nothing more than a promise. Each state recognizes that the nature of any insurance product is ripe for fraud and has implemented checks and regulations to ensure insurance companies have the financial ability to meet their obligations to their policy holders.

A recent case in Florida serves as an example: "An investigation by the Department of Financial Services Division of Insurance Fraud revealed that Otto Biltres, owner of a temporary staffing agency called Preferred Staffing of America, Inc., knowingly misled consumers into believing that his company was a licensed professional employer organization (PEO) and could perform PEO services such as providing workers’ compensation insurance coverage to client companies. Biltres charged client companies more than $130,000 for services and workers’ compensation insurance that was never provided."
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8/6/2013 Detroit business exodus: Fight back with a PEO?

Source: StaffMarket
Detroit business exodus: Are the same problems coming for your business? Business owners in Detroit explain why the moved their companies out of the city.
A recent article at American Thinker exposes some of the key costs and risks that business owners face when trying to staff their companies in an area that becomes hostile to employers. The stories about the problems of Detroit span the spectrum from race to politics to crime to global economics. But one factor that gets overlooked is the hostile environment Detroit created for small businesses. As we all know, small businesses create the majority of jobs in America but the problems they face don’t get much attention. When small businesses fold or flee, the underpinnings of a local economy are in peril.

In this article I would like to comment on the frustrations expressed by the business owners quoted in the New American story and note how in many cases these same problems are happening across the USA. PEOs are in business to help their client companies address these risks.

Excerpts from The American Thinker "How Detroit Almost Killed My Business" are highlighted in red: Businessman Don Wilkie discusses his experience as a small business owner in Detroit and explains his reasons for relocating his business. His story is something many small business owners can relate to.

Rather, the beam that really broke the behemoth’s back was built with "Unemployment Insurance, Workman's Compensation and Wrongful Discharge (i.e. age discrimination, sex discrimination, racial discrimination etc.) [lawsuits]," writes Wilkie. He says there’s a dearth of jobs in the city because "in Detroit, hiring someone became the worst thing an employer could do, and being fired became one of the best days in an employee's life."

Let's take a look at the three main things Mr. Wilkie mentioned, why they are important for business owners and how hiring a PEO could have reduced Mr. Wilkie's pain.

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7/30/2013 HR - Big savings for small business

Source: The Fiscal Times
Article is largely a commercial for TriNet, but does discuss some great PEO subjects.
Yet Professor Peter Cappelli of University of Pennsylvania’s Wharton Business School, disagrees. "I'm usually not a fan of these things, but this is one of those rare instances that is both cheaper and better," he says. "It's a big burden on a local HR manager to know everything."
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7/11/2013 Tortilla Factory Owner Jailed for Workers' Comp Felony and Labor Law Violations

Source: New York Times
The state of New York has jailed a business owner who failed to provide workers compensation insurance and ignored other payroll laws.
Mr. Ponce, 57, was arrested by the attorney general’s office in March 2012. In June 2012, he pleaded guilty to failing to pay adequate wages, a misdemeanor. He also pleaded guilty on behalf of his company to another count of failure to pay wages, and a count of failure to secure workers’ compensation insurance for his employees, a felony.
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7/11/2013 Affordable Care Act: Employer Mandate Delayed, but Other 2013 Requirements Remain

Source: StaffMarket
While the employer mandate to provide health insurance or pay a fine has been delayed one year until 2014, other provisions of the ACA will still be implemented for employers in 2013.
The US Treasury Department announced a change to the Affordable Care Act timeline that all US employers should understand. The deadline for compliance with the employer mandate has been postponed for one year. The ACA provision for large employers (50 or more employees as defined by the ACA) to offer qualifying health coverage to employees, or pay a penalty, has been delayed for one year from January 1, 2014, until January 1, 2015.

In addition, the requirement for employers to report information to the IRS about the health coverage they offer was delayed until the 2015 tax year. Now, reporting health coverage information will be voluntary when businesses file their 2014 tax return.
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7/9/2013 High Wage Earners may feel ACA Impacts

Source: StaffMarket
For High Wage Earners without Company Sponsored Health Insurance things are likely to get way more expensive.
High wage earners who work for a company that does not offer health insurance are the biggest losers under the new ACA regulations. Those people making more than 4 times the poverty rate or roughly $85,000 per year that do not have employer sponsored health insurance will be the ones who pay the freight under ACA. Why? In a nutshell, they make too much money to be eligible for a health insurance subsidy on the individual health care exchanges and in addition they do not get the favorable tax treatment for their health insurance payments that they get with an employer sponsored health plan. Of course they can get tax deductibility for medical expenses but only once the out of pocket expenses for the year exceed 7.5% percent of their total income and then for only the expenses above that amount. Very few people are in that unfortunate situation. So the bottom line is: No subsidy from the government, no tax deductibility for insurance premiums and forced to purchase health insurance at the prices on the individual market exchange.

Individual market health insurance exchange – what does it cost? Everyone in the country seems to be using the Kaiser website to get an estimate of their heath insurance premium costs (and subsidy) under the new ACA guidelines. However, the fine print there states that these are just “estimates” and that the actual cost of the plan(s) is yet to be determined. So what will the rates look like in the ACA individual marketplace? Who knows, but the answer will depend on several factors:

ACA Health Insurance Rates By State Location

Government Price Setting States

Some states like California are getting involved with rate setting for the insurance carriers and are digging deep in the claims costs and expenses for the insurance companies. While NBC News calls this model a “passive” state, this is just newspeak for government price setting. Of course this could be why Aetna and United (the nation’s largest insurance carrier) have exited the California insurance markets for individual polices.

Open Market Pricing States

Other states will let the insurance carriers set the rates available for the plans they offer on the exchange. This means that each insurance company will look at their claims costs and their market competition and price their plans accordingly.
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7/2/2013 Understanding the ACA "Large Employer" Threshold. Who is subject to the penalty, er tax.

Source: StaffMarket
Does the ACA affect your company? Understanding the 50 employee threshold and who is considered a Large Employer. Information about calculating Full Time Equivalent(FTE) employees.
Update for July 2, 2013. An announcement by the US Treasury Department has stated that the implementation of the “Employer Mandate” will be delayed one year until 1/1/2015. Originally the mandate was to be in force on 1/1/2014.

The ACA mandate for employers to provide health insurance only affects employers with over 50 employees. Some businesses owners may think that they will be under that 50 employee threshold when in reality they may not. The considerations for part time employees and the business aggregation rules may surprise many business owners who thought they were not affected. Per the ACA employees who work over 30 hours per week (130 hours per month) are considered full time employees. To determine whether you will be considered a large employer you need to add together 2 groups:
  • The number of current full time employees
  • Plus: The number of FTE (full time equivalent) employees

Determining the FTE Full Time Equivalent Numbers
The rational for calculating an FTE is to ensure that part time employees are included in the determination of the status as a “large employer”. Part time employees are included in the calculation on the basis of how much time they actually worked (or were paid). This means that even companies with a small full time staff and a large part time staff may very well be considered a large employer under PPACA. Restaurants and other hospitality based business with a large part time staff can expect to be impacted.

To determine the number of FTEs, add together the total number of hours in the month worked by all the non full time employees (up to a maximum of 120 hours per part time employee). Next divide this number by 120 (monthly rate of 30 hours times four weeks). Do this calculation for each month of the prior year and then compute the annual average by adding the numbers for all the prior 12 months and then divide by 12. The resulting number is the value for the full time equivalent employee count. Click here for an example FTE calculation. It is important to note that leased employees are included in the FTE calculation. If your company is currently using a PEO, your company still must include those leased employees in the FTE calculation. In addition, seasonal employees working less than 120 days during the prior year are excluded from the FTE calculation.

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5/30/2013 EMPO Clients Acquired by G&A Partners

Source: StaffMarket
Minnesota based PEO delivers clients to Texas based G&A Partners
G&A Partners a Professional Employer Organization (PEO) in Houston Texas, announced that they have acquired the clients of EMPO Corporation, a Minnesota domiciled PEO. According to the announcement in the Wall Street Journal, EMPO had roughly 100 PEO/ASO clients that will be transferred to G&A partners. According to the article the staff at EMPO will remain and transition to positions with G&A Partners. Financial details of the client acquisition were not disclosed. Clients of EMPO may want to review the StaffMarket article for what to do if your PEO was just sold.
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5/17/2013 NAPEO Announces Ad Initiative

Source: StaffMarket
The National Association of Professional Employer Organizations expands the PEO message.
NAPEO recently release a new slogan, “Keep Calm and Call a PEO”. The advertising is shown with the image of the British crown. The ad copy appears to be a take off from a campaign in Britain at the beginning of World War II that was meant to keep up the spirits of the British population who feared invasion. Watch a video about the origin of the “Keep Calm” campaign. Given the situation facing many small and medium sized business today, the campaign slogan appears very appropriate for the times. NAPEO - Keep Calm
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Latest Comment: - 7/27/2013
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5/2/2013 Workers Comp Pricing Gets Harder

Source: CFO.com
CFO article about increases in work comp insurance costs and what larger companies are doing to keep costs down.
The examples of how companies are take lots of first dollar risk and implementing safety and claims management practices is important for companies to understand. However these are large companies like Red Robin that can afford to have dedicated staff to implement these changes. Many small companies do not have the expertise or the knowledge to implement these kinds of strategies and therefore are getting hit the hardest with rate increases and in some bad cases are finding it difficult to get any WC coverage. Even Professional Employer Organizations or PEOs are being challenged to underwrite many of these small accounts.
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Latest Comment: - 7/27/2013
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5/1/2013 Merit Resources Acquired

Source: Iowa Network Services
Merit Resources an Iowa based PEO has been acquired by a telecom company named Iowa Network Services.
The information release indicates that the senior management team at Merit Resources will remain in place. Merit has been a longtime PEO presence with clients primarily located in Iowa. Merit has been based in Des Moines, IA since 1989 and is the largest PEO in the state. Today, Merit provides valuable HR solutions to more than 400 clients and 11,000 worksite employees across 40 states.
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4/29/2013 NFIB Survey - Many Top Business Concerns Addressed by PEOs

Source: StaffMarket
The National Federation Of Indepedent Businesses survey conducted in August 2012 ranks top business concerns. PEOs help with 14 out of 75 main areas.
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Latest Comment: - 5/3/2013
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4/25/2013 Obama 2014 Budget Proposal - Impact for Employers

Source: StaffMarket
President Obama's proposed budget for 2014 has impact for small businesses
President Barack Obama has sent the US Congress his proposed budget for 2014 and it has some significant impacts and opportunities for small employers. Whether these provisions actually become law remains to be seen, however, HR and business managers of small and medium sized companies need to be aware of what may be coming down the road. Business owners should review the highlights listed below and start planning now for how these items may impact their companies and what processes will need to be implemented or revised in order to ensure regulatory compliance. Companies using a PEO should review the items below and discuss them with their PEO HR advisor to understand how their PEO will be addressing these items on the client’s behalf. 
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2/6/2013 PPACA Burdens for Businesses

Source: StaffMarket
The impacts of PPACA, or Obamacare is now starting to be understood for business owners and managers. The impacts on the productivity of the economy is estimated at 127 million man hours.
For the last several years, many business owners have been ignoring the impacts of the PPACA on their businesses. It will never survive the Supreme Court challenge... oops. It will be overturned by Romney after he wins the election... oops again. Now the political drama appears to be over for the moment and business owners and managers are starting to assess what is really required to meet the terms of the new laws. While every business has unique individual circumstances, the overall impact on businesses in the USA are now starting to be tallied. Congressmen John Kline, chairman of the Education and Workforce Committee today unveiled the ObamaCare burden tracker.

The tool attempts to estimate JUST the administrative time spent for business to adhere to the terms of the law.
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1/14/2013 Compass Investment Partners Acquires CoAdvantage Resources

Source: CIP Capital
Co-Advantage Resources of Orlando, Florida has been acquired by Compass Investment Partners. Financing for the purchase was through Madison Capital Funding LLC (New York Life), TIAA Cref and Fifth Street Finance.
CoAdvantage Resources is a leading Professional Employer Organization (PEO) that offers small and mid-sized businesses a comprehensive package of outsourced human resources solutions enabling them to reduce their administrative burden, ensure compliance with employer regulations, and gain access to affordable employee benefits. The Company integrates payroll and tax processing, employee benefit plan administration, risk management, government compliance and other human resources services into a single vendor solution that is extremely efficient and effective.
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12/13/2012 Aetna CEO: Some Health Insurance Premiums Will Double

Source: Bloomberg
Aetna CEO Mark Bertolini tells analysts that the Affordable Health Care Act (PPACA) will cause small group health insurance and individual policy premiums costs to skyrocket
The CEO of the national third largest health insurance company predicts that the costs from banning discrimination for per-sexiting health insurnace underwriting will drive costs to nearly double current rates. "Those taxes will make coverage more expensive for insurers, as will other provisions such as a ban on discriminating against people with pre-existing medical conditions, Bertolini said. Premiums are likely to increase 25 percent to 50 percent on average in the small-group and individual markets, he said, citing projections by his Hartford, Connecticut-based company. "
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11/9/2012 Health Insurance for Business Owners under ACA – Which way to turn?

Source: StaffMarket
The exit of insurance agents and advisors leaves business with less guidance while health plan costs and regulatory impacts soar. PEOs see an opportunity.
While business across the USA struggle to access the impact of the ACA laws on their company health plans and their employees, the traditional pool of people to help them figure it all out is going away. Many employers are now becoming aware of the reality that the November 2012 defeat of Mitt Romney all but guaranteed that the ACA is here to stay. Business owners who had deferred planning on their health insurance options are now under the gun to understand their options for themselves and their employees. The implementation schedule for the ACA is already underway and for business owners and managers, important compliance issues and decisions must be made.

Company Sponsored Health Plans Decisions - More Complex and More Significant
For small and mid-sized businesses the complexity of making decisions about how to handle their health insurance plans or whether to offer one at all, just got much more complicated. For every business there is a unique set of factors that will influence their health insurance plan decision.
  • Meet the legal requirements or pay the fine – What is the best option?
  • What tax credits are available if we continue are plan? (35% in 2013 and 50% in 2014)
  • What plan design and combination of co-pay and deductible is legal, affordable and fits our employees?
  • Should we kill our plan, pay the fine and let our staff go to the individual exchanges being promised? What happens to the employee pretax treatment for premiums if we do that?
  • What about part time employees, should we reduce full time staff to avoid the fines?
  • Should we offer different benefits for different employee groups like managers?
  • How much should we pay towards the premium? For employee only? Family plans?
  • What networks will be available for the carriers that fit our needs?

This is just a start on the complicated analysis required for business owners who want to maintain legal compliance with ACA and still provide and affordable plan for their staff. Get more detail on navigating the ACA.

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10/30/2012 Time off to vote - Voting laws by state

Source: StaffMarket
Review voting laws for all US states
Employees and employers need to know the rules for their state.
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10/23/2012 Employee Health Coverage Reporting Changes affect PEOs and PEO clients in 2013

Source: StaffMarket
Affordable Care Act requires 2012 W2 information to include value of employer sponsored health coverage
Effective for federal W2s for the calendar year 2012 (issued in early 2013), companies and employees working with a Professional Employer Organization will notice that the value of employer sponsored health coverage is now included on the employees W2. The value of the coverage will be shown in W2 form Box 12 with code DD.
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10/18/2012 Payroll Tax Increase Coming for 2013

Source: StaffMarket
Employee FICA Tax Reverts to 6.2% starting January 1, 2013
After two years (2011 and 2012) of being reduced from 6.2% to 4.2%, the employee FICA payroll tax on employment wages is set to revert back to 6.2% effective the start of 2013. The current maximum wage base for the calculation is 110,100 for 2012 and is set to rise to 113,700 for 2013.

According to the Wall Street Journal, there does not appear to be any political motivation from either the Republicans or Democrats to extend the FICA reductions in to 2013 so right now it appears that the tax will revert back on January 1, 2013. It is estimated that the reduction has cost the US government $120 billion per year for the last two years and the reduction saves the average family $933 each year.

As of today, with two presidential debates completed and tax policy being a major discussion items between the candidates there has been no mention of this tax increase that will impact all working Americans very shortly. For the average working American earning $50,000 per year this is will mean an additional $1,000 per year tax hike just for social security taxes. The FICA matching tax amounts for employers will remain unchanged since it was never part of the temporary tax cut.
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10/9/2012 Manager - Worker Romances: Not a Good Idea

Source: StaffMarket
Employers who allow managers and subordinates to become involved romantically face significant financial risks
Given that many people spend as much or more time at work as anywhere else, and the fact that women have entered the workforce in mass in the last 30 years, well it is only natural that humans will do what humans do. And that is where the trouble can begin when one of them has supervisory authority over the other. Why does it matter? Well if you think that what happens between consenting adults is no one else’s business and that it is not your concern as an employer, then you could be making an expensive mistake.
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9/14/2012 SOI - Strategic Outsourcing Inc. Purchased by Trinet

Source: StaffMarket
SOI - A PEO headquartered in North Carolina and longtime presence in the Southeast United States has been purchased by Trinet.
Strategic Outsourcing Inc. known as SOI and one of the nations largest Professional Employer Organizations (PEO) has been purchased by Trinet. According to information from SOI, they process over $2.5 billion in payroll for over 62,000 worksite employees. SOI was founded by Steven Mariano the late 1990s and was later sold to Union Planters Bank which later became Regions Bank. Executives at SOI included CEO Carl Guidice, President Gil Aleman, Sales EVP Eldridge Bravo and COO Anthony Dannon. Mr. Danon was formerly the VP of finance at Staff Leasing, Inc. a publically traded PEO that later became Gevity and was later taken private when purchased by Trinet. SOI has headquarters in Charlotte, North Carolina. Trinet may now become the nation’s largest PEO at 104,000 worksite employees following the spring acquisition of Accord HR in Oklahoma City Oklahoma. According to information from Alphastaff, SOI had 2.9% of the PEO market in 2010 and Trinet had 1.9% of the PEO market.
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8/13/2012 Illinois Clarifies Job Credits for PEO clients

Source: State of Illinois
The state of Illinois recently extended the Small Business Jobs Creation Tax Credit program to run through the end of June 2016. PEOs were also included in the program extension.
First, we extended the program to run from July 1, 2012 to June 30, 2016. The other new piece to this program is that PEO’s (Professional Employer Organizations) would be able to receive a tax credit based on their working relationship with an eligible business.
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7/27/2012 Florida Amends Unemployment Compensation Rules for Employee Leasing Companies

Source: StaffMarket
The state of Florida now allows PEOs to elect to use either a master experience unemployment rate or the individual UI rate of each of their clients. Once declared, the method cannot be changed and applies to all of the PEO's existing clients and future clients.
Florida has adopted changes to the way employee leasing companies (also known as Professional Employer Organizations or PEOs) may pay and report contributions for state unemployment taxes. With the new rules, employee leasing companies in Florida are allowed to make a one-time election to use the unemployment rate (for non-internal employees) of each individual client rather than a single rate established for the whole employee leasing company. Under the client level election, the unemployment claims and tax payments may now be done using the tax identification number of the employee leasing client rather than the tax ID of the PEO.
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7/24/2012 Small Firms Turn to Professional Employer Organizations

Source: WorkForce.com
Article discusses the reasons many entrepreneurs hire a PEO. Savings on health insurance are also reviewed.
"The only downside is the administrative costs, but I more than make up for it in what I pay for health care insurance," said Wald, whose firm covers 80 percent of its workers' health insurance costs in addition to paying an administrative fee of $100 a month per employee. "I would bear an extra $80,000 in health insurance costs if I switched out of the PEO."
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7/13/2012 Criminal Background Checks for Job Applicants

Source: StaffMarket
Background checks create a mine field of risks and fines for employers.
In May of 2012, the Equal Employment Opportunity Commission released guidelines for employers regarding the consideration of arrest and conviction records when make a hiring determination. With high unemployment in the United States and the increasingly large number of citizens who have had run-ins with the police, it is almost inevitable that employers will be forced to review their stance on asking about arrests and convictions during the application and hiring process.According to the National Employment Law Project one if four U.S. adults, over 65 million people, have an arrest or conviction that shows up on a standard criminal background check. The NELP report, “65 Million Need Not Apply”, released in March 2011 documents that both and large employers routinely deny employment opportunities to people with any blemish on a criminal background check in direct violation of Title VII. In 2010, RadioShack and their client Choice Point (their background check provider) were heavily fined by the EEOC. The report notes that “ChoicePoint, which accounts for an estimated 20 percent of the U.S. background check industry conducting more than 10 million annually, played an integral role in designing and implementing RadioShack’s unlawful practices. It created an online application system that automatically dismissed anyone who self-disclosed a criminal record history. ChoicePoint also conducted background checks for RadioShack that reported sealed and dismissed convictions, in violation of state law.” The increase in legal actions highlights the widespread non-compliance of employers with federal law, and the growing interest in pursuing legal actions against employers, staffing firms, and background check companies for unlawfully excluding people with criminal records from work. To avoid the wrath of the EEOC and mitigate the legal risk of discriminatory suits regarding section VII violations, all employers need to use care when using background checks for job applicants. Employers who automatically ask all applicants about arrests and then automatically deny employment to those with records will be in violation of the law and may be exposed to significant fines from the EEOC in addition to civil and class action lawsuits.
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7/9/2012 Hawaii PEOs Convince Governor to Revise Bonding Requirement

Source: Maui News
With support from the Maui Chamber of Commerce, PEOs and employment agencies in Hawaii convinced the governor to veto Senate bill 2424 related to Professional Employer Organizations. The vetoed bill proposed raising the bonding requirement to $500K and up to $1M for larger firms.
Act 129 passed in 2010 and is current law. It includes a performance bond requirement of $250,000 for professional employer organizations (deemed by the state to include smaller employment agencies who did not feel they came under this law). This bond amount is higher than all but one state with a bond requirement and created an insurmountable challenge for many employment agencies statewide. Insurance agents and businesses seeking these bonds report that all of the major bonding companies in Hawaii do not want to issue these bonds to employment agencies. The time, hurdles and added costs are huge. In fact, to get such a bond, these small businesses would have to leave cash reserves in the amount equal to the required bond amount untouched. Unable to get a bond in Hawaii, many firms are not compliant with the current law - a law passed without talking to the affected industry and without solving a real problem back in 2010. To date, despite contacting multiple state offices, we have not heard of a single case where consumers needed to be protected to justify the writing of this law.
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7/5/2012 State of Pennsylvania enacts PEO Legislation

Source: State of Pennsylvania
Pennsylvania governor Tom Corbett has approved comprehensive legislation (House Bill 1055) for Professional Employer Organizations operating in that state. The bill includes many recommendations of the National Association of Professional Employer Organizations (NAPEO) and the National Association of Insurance Commissioners (NAIC).
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7/4/2012 Tough Health Care Choices for Georgia Businesses

Source: Atlanta Journal and Constitution
Business owners in Georgia comments on the impact on their companyies from rising health insurance costs and the supreme court ruling on The Patient Protection and Affordable Care Act (PPACA). One business owner notes the health insurance savings for her staff when her company joined a PEO
Julie Haley, chief executive of an information technology company in Alpharetta called Edge Solutions, says she paid exorbitant insurance rates to cover employees when she started her company in 2008, and she knew she had to make a change a year later when her premiums shot up 33 percent. "We're lucky we stayed in business," Haley said. She switched to a professional employer organization that insures her company's 25 employees that is cheaper but that also includes human resources services that Haley doesn't need. She hopes the health insurance exchanges set up by the overhaul will lead to lower insurance costs. "The people who are afraid are the misinformed who have been listening to too much fear-mongering," she said. "You can't keep growing jobs here with the rising cost of healthcare. Our premiums are so expensive now because we are paying for people without health insurance." Haley said she thinks her costs will drop enough starting in 2014, when many of the changes take effect, that she'll be able to hire more employees.
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6/25/2012 Michigan clarifies UI / SUTA rates of PEO and new Clients

Source: State of Michigan
Governor amends existing legislation to modify the "look-back" period for determining the Unemployment Insurance rates for clients joining and leaving a PEO.
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6/25/2012 Your Company Cell Phone Policy

Source: StaffMarket
Uh, Company Cell Phone Policy. You do have one, right?
In December 2011, the National Transportation Safety Board called for a nationwide ban on the use of cell phones and text messaging devices while driving. With the increasing reliance of employees on mobile communications this ban would have a major impact on employers. Increasingly employees are using mobile devices to stay connected with their work while out of the office. Conversations with clients, prospects and home office staff may be conducted while behind the wheel and doing company business. Many devices now enable full email and web browsing as well as standard texting. Many employers encourage employees to multi-task at the office, but should they be doing that when behind the wheel? According to the NTSB report over 3000 driving fatalities where reported in 2011 involving distracted drivers. A Virginia Tech Transportation Institute study of commercial drivers found that a safety-critical event is 163 times more likely if a driver is texting, e-mailing or accessing the Internet.

mobiile policy

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6/22/2012 Michigan PEO Licensing Deadline Nears

Source: StaffMarket
Recent Michigan legislation requires Professional Employer Organizations to apply for a license and pay a registration fee.
The state of Michigan recently enacted legislation regulating all Professional Employer Organizations (PEO) in the state. All PEOs with clients in the state must submit an application and pay a fee to the state by July 1, 2012. The Michigan bureau of Commercial Services (BC) has indicated that licenses will be issued by issues by September of 2012 and no PEO may operate in Michigan after that date without first obtaining a license.
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6/20/2012 Top 10 Tips for Small Businesses

Source: Water Well Journal
People management skills are critical for small businesses. Top 10 tips for success.
By outsourcing some or all of their employee related tasks such as payroll, benefits, health care, recruitment and retention, small business owners can focus on what they do best. They can improve productivity and also save some money. According to the SBA, business owners spend from 7% to 25% of their time handling employee related tasks. Consider using a human resource outsourcer—also known as a Professional Employer Organization “PEO”, or an administrative service organization “ASO”. The primary advantage of outsourcing, as opposed to hiring or designating someone in-house, is the expertise these companies bring. Instead of hiring one generalist, you get dozens of HR related experts.
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6/19/2012 Barrett Business Services Ownership Changes

Source: Seattle Times
Washington state based PEO buys out interest of former CEO's estate.
The widow of Barrett Business Services former CEO, William Sheretz, has sold her equity interest back to the company for $59.72 million. Board members agreed to buy out her stake after her failed attempt to appoint her own group of company directors. Barrett Business Services is a Professional Employer operating in the Pacific Northwest area of the USA.
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6/8/2012 Tennessee Passes PEO Legislation

Source: StaffMarket
The state of Tennessee has passed Senate Bill 2633 that regulates Professional Employer Organizations operating in Tennessee.
The Tennessee State Senate has passed Senate Bill 2633 that codifies the requirements for PEOs with clients in Tennessee. The new legislation contains provisions for Professional Employer Organizations in TN and clarifies the rights and responsibilities of both PEO and their clients. PEOs operating in Tennessee will now be required to provide audited financial statements to the state, proof of workers' compensation policy validity and proof of adequate working capital (or appropriate bond).
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5/24/2012 Oklahoma Based Accord HR Acquired by Trinet

Source: StaffMarket
Well known Oklahoma based PEO sells to Trinet
On April 26, 2012 San Leandro, CA based Trinet announced the acquisition of Oklahoma City based AccordHR. Both companies are privately held and terms of the sale were not disclosed. Oklahoma based AccordHR was founded in 1992 by Dale Hageman and grew to be one of the largest PEOs in Oklahoma. In 1995, AccordHR joined forces with John Jones in Tampa, Florida where a separate PEO was established (Accord of Florida) with Mr. Jones acting as president. According to the State of Florida, Accord HR has twelve active operating companies in Florida. In Oklahoma, Accord Human Resources has thirteen operating companies.
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5/22/2012 PEO Industry Members Promote Small Business Efficiency Act (SBEA)

Source: StaffMarket
PEO Industry Members Promote Small Business Efficiency Act (SBEA). PEO industry leadership group goes to capital hill seeking favorable legislation.
Members of the National Association of Professional Employer Organizations (NAPEO) met in Washington DC this week for the annual NAPEO legislative leadership conference. While attending the conference many PEO executives also took the opportunity to meet with various legislators and staff regarding their promotion of the Small Business Efficiency Act (SBEA). The bill is known as H.R. 2466 in the House of Representatives and S. 1908 in the Senate with sponsorship provided by representatives Mike Thompson (D-CA) and Kevin Brady (R-TX) in the house and Bill Nelson (D-FL) and Charles Grassley (R-IA) in the Senate.
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5/16/2012 Is your business leaking money?

Source: Business 2 Community
Good information about how business owners can put costs under the microscope and how outsourcing to a PEO can help.
Obviously, any given business may vary from this list, depending on its operating model and industry. However, it's worthwhile to consider, not just how you can cut costs in these major categories, but how you can restructure them to be more appropriate for you. For example, a Professional Employer Organization (PEO) can save small businesses huge amounts of payroll, tax and benefits-related costs, while still giving workers similar compensation packages.
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1/17/2012 Administrative Concepts Sells PEO Operation

Source: StaffMarket
Administrative Concepts (ACC) a long time PEO in Florida has sold its operation to Progressive Employer Management Company (PEMCO) a Professional Employer Organization located in Sarasota Florida.
January 15, 2012

Administrative Concepts (ACC) a long time PEO in Florida has sold its operation to Progressive Employer Management Company (PEMCO) a Professional Employer Organization located in Sarasota Florida.

ACC was founded in 1995 by George Bushong and his wife Sarah Peel. Mr. Bushong has had a long time involvement with the employee leasing industry and was part of the original group that created Staff Leasing in Bradenton, Florida in the early 1980s. Mr. Bushong helped maneuver his company, ACC, through the tumultuous period of workers’ compensation insurance in 2001 by starting his own workers' compensation carrier, Southern Eagle Insurance. Creating the insurance company allowed ACC to offer their employee leasing clients workers' compensation insurance when many traditional work comp carriers would not write policies to any employee leasing companies. The strategy helped ACC grow during a time period when many other employee leasing companies were being forced to close their doors. The effectiveness of that strategy came to an abrupt end when Southern Eagle Insurance Company was forced in to receivership by the Florida Chief Financial Officer, Jeff Atwater on December 16, 2011.

Any former clients of ACC who have outstanding workers' compensation claims prior to the merger with PEMCO should review information located at the Florida Division of Rehabilitation and Liquidation about how Southern Eagle Insurance claims will be paid. With the entry of the liquidation order, the Florida Workers' Compensation Insurance Guaranty Association (FWCIGA) was activated to help pay claims for workers' compensation policies.
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1/6/2012 Employee Leasing Solutions Sold

Source: StaffMarket
One of the founders of the employee leasing industry, William Mullis has sold his company, Employee Leasing Solutions to a new employee leasing company named Workforce Business Services.
January 6, 2012.

One of the founders of the employee leasing industry, William Mullis has sold his company, Employee Leasing Solutions to a new employee leasing company named Workforce Business Services. According to information on the ELS website, Robert Kelly a long time business partner and executive at ELS has purchased the interest of Mr. Mullis. Terms of the sale were not disclosed.
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12/8/2011 Eight US States Increase Minimum Wage Rates for 2012

Source: StaffMarket
Eight US States have new minimum wage rates for 2012. Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington have new minimum wage rates effective January 1, 2012.
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12/5/2011 Chiropractors Explore Alternate Staffing Arrangements

Source: Chiropractic Economics
Article discusses the challenges faced by medical organizations when staffing to meet their business needs. Contract labor, staffing companies and Professional Employer Organizations offer options that come with differing employer responsibilities.
Today, many professional practices and businesses need help managing increasingly complex employee-related matters such as health benefits, workers’ compensation claims, payroll, payroll tax compliance, and unemployment insurance claims. They often contract with a professional employer organization (PEO) to assume those responsibilities and provide human resources management. This allows the business owner to concentrate on the operational and revenue-producing side of his or her operations.
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11/21/2011 Senate Bill seeks to clarify tax treatment for PEOs

Source: StaffMarket
US Senator Chuck Grassley introduces senate bill SB 1908 that seeks to clarify tax treatment for Professional Employer Organizations (PEOs).
November 18, 2011

US Senators Chuck Grassley and Bill Nelson have co-sponsored legislation that would amend the IRS tax code to clarify the tax treatment for companies operating as professional employer organizations. The PEO industry has long sought clarification from congress on the tax implications for PEOs. This clarification has important ramifications for PEOs and their clients.
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11/16/2011 NAPEO Names New President and CEO - Pat Cleary

Source: StaffMarket
The National Association of Professional Employer Organizations (NAPEO) names new President and CEO.
After nearly a year of searching for a new president and CEO for NAPEO (the national association of professional employer organizations) Pat Cleary has been named to the position. The former NAPEO president and CEO with the organization resigned on December 31, 2011 after serving in that role for 15 years. Joe Cole served as the interim CEO.
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11/9/2011 Pennsylvania Senate moves on PEO legislation

Source: StaffMarket
The Pennsylvania senate has scheduled SB 1069 that regulates Professional Employer Organization activities in the state.
The PA senate has scheduled SB 1069 that addresses the operating rules for Professional Employer Organizations (PEOs) doing business in Pennsylvania. The PA house has already passed a similar bill, HB 1055. Details include a requirement for PEOs in the state to provide audited financial statements to the state and to meet a working capital or bonding requirement. Read the bill here:
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9/28/2011 Health Care Reform for Small Employers - Calculating Full Time Workers

Source: Employers Association of New Jersey
Health care reform set to take effect in 2014 requires employers with 50 or more full time workers to provide health insurance premiums for their employees or face penalties. But determining how to calculate the 50 employees threshold can be tricky for companies that have a season workforce of have a large number of part time employees. This article explains.
The issue is complicated because hourly workers are included in the arithmetic employers must use to determine whether or not they have 50 "full-time equivalent" workers. The law defines a full-timer as an employee who works at least 30 hours a week, or 130 hours per month. But for hourly workers, the employer totals all the hours they work in a month, and then divides by 120 to arrive at the number of full-time equivalents, who are then added to the full-time work force.
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