As any savvy business owner knows, there is a seemingly endless stack of rules for employers to follow. A key reason many business owners join a PEO is the assurance provided that rules and regulations for employers are being met. In turn, one of the most important tool for employers is an employee handbook.
About that employee handbook
Part of the value of joining a PEO is that they are continually monitoring the changing regulatory landscape to determining the best practices and language that should be in an employee handbook so that the risk of running afoul of employment laws is reduced and hopefully eliminated. The foundational document in every company should be their employee handbook. The employee handbook is the basis of the do’s and don’ts for each company employee. Once created and published, it should be standard practice in your hiring process to deliver the handbook and obtain a written acknowledgement from the employee that they have read and understand the contents of the handbook. Believe it or not, that’s the easy part. The bigger questions is: What are the rules for employees identified in the handbook? For employers this can be a tricky area. As you might expect, federal and state governments have their own set of regulations for employers about what rules employers can establish in the workplace. The NLRB has new expectations (2015) about employee handbooks and their expectations of employers. Some PEOs consult with labor lawyers for this advice, while others have their own in-house legal teams. When a company joins a PEO creating a tailored employee handbook is part of the process.
Best to follow your PEOs advice
So your company signed on with a PEO, implemented your employee handbook and went on about your business, but your company still has some responsibilities. When a business joins a PEO, the PEO will help the business construct an employee handbook that meets that company’s needs and meets the regulations at the time it was implemented. But as time goes by and regulations change, that handbook may become out of date and possibly even illegal. A responsible PEO will reach out to their clients and advise them on the changes or updates that need to be made.
Listen to your PEO
Most PEOs have hundreds or thousands of small business clients. When your PEO contacts you and advises your company to make a change…. It’s best to heed their advice. Why? Well obviously you want to follow the rules, and by doing so, prevent legal troubles for your company. But another good reason is that in the event there is a complaint filed against your company, the PEO may be able to argue that your company ignored their guidance and therefore they are not liable for the damages or fines. Recently our staff attended a meeting with executives at one of the nation’s leading PEOs. When we asked what actions they were taking to inform their clients about the new NLRA title VII rulings, they indicated that they had reached out to all of their clients to provide guidance on the topic. They executives noted with some frustration that many of the clients never responded to their outreach. When our staff (at StaffMarket) asked if that created a liability for their PEO, they said that they were protected due to language in their Client Services Agreement (CSA).
Always read the fine print
Rest assured that your PEO wants your company to be compliant with all employment related regulations. However, the Client Service Agreement signed by your company and the PEO is the final say on who is responsible in the event of a problem with regulators. It is the key document that all PEO customers need to read carefully and understand. Just because your company joins a PEO does not mean you don’t share some of the burdens of ensuring regulatory compliance.
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