How A PEO Keeps You Compliant In Today’s Sea of Regulations

As you may have noticed over the past several years, regulations and legal obligations have increased tenfold and business owners are seeing that is more difficult to keep pace. In addition to accomplishing all of your daily revenue-producing tasks — which, let’s be honest, you probably don’t have enough hours in the day to complete to begin with — you must also stay abreast of all the changes the state and federal agencies are directing to business owners. With audits continually on the rise, non-compliance could be a very costly pitfall for your company.

In a recent article from PEO Insider, Jenny Swinterton explains that “failing to provide proper notice to [COBRA] participants” can cost you “up to $210 per day.” She goes on to say, “If just one COBRA form is not sent out and the mistake is not caught for two months, the penalty can be more than $12,000.” And that is just one small part of a multitude of forms and regulations you are required to keep up with.  If you are a small business, this task can be overwhelming, but the thought of hiring new staff to handle HR issues may be out of the question for you at this time financially. Larger companies may have an HR department, but have questions when specific situations arise or an audit emerges.

This is one of the many reasons a quality PEO can be invaluable to your company and the growth of your business. ERA works closely with our clients’ HR departments to ensure each client is compliant based on their specific industry requirements. We take a proactive approach to training clients’ employees with the respective HR supervisors so noncompliance issues and accidents can be avoided from the start. If you have questions about ERA and how we can assist you in handling these daunting tasks, feel free to contact us for a meeting to find out if ERA might be a good fit for your organization.

Source: Swinterton, Jenny. “The High Cost of Noncompliance.” PEO Insider December 2011 – January 2012: 26-28.

 

Workers’ Compensation vs. Nonsubscribers

As business owners in the state of Texas, we are fortunate to have options when it comes to choosing workers’ compensation insurance in that we have the option to opt out of the state’s system and become a “nonsubscriber.” Employers can choose to implement their own insurance programs that provide medical benefits, wage replacement benefits, disability benefits and death benefits. In the past, this has been a much more affordable option and approximately 44% of Texas businesses operate as non-subscribers today.

However, alternative coverages and accident policies are not exact substitutes for workers’ compensation. Since “tort reform” in 1993, the cost of workers’ compensation insurance has decreased dramatically, many times bringing the cost to about the same as non-subscriber plans. There are many advantages associated with workers’ compensation and you could most likely benefit by revisiting your options when it comes to workers’ compensation and accidental insurance.

As a non-subscriber, you forfeit your common-law defenses if sued because of a work-related injury, meaning, as an employer, you cannot argue that the employee’s negligence contributed to the accident or that the employee knew the risk of injury and voluntarily assumed it. Furthermore, the court could order you to assume legal fees for the employee as well as compensation for suffering and punitive damages. Employers who subscribe to the state’s workers’ compensation program are protected by the Texas Workers’ Compensation Act which prevents employees from suing.

View the following chart provided by the Texas Department of Insurance to compare the various coverage types:

Coverage Comparison

Workers´ Compensation “Alternative” Policy Unauthorized Policy No Coverage
Who determines benefit levels? Texas law Court Court Court
Who pays medical and lost-income benefits? Insurance carrier Insurance company up to policy limits; employer pays rest Depends on the policy Employer
Who pays employer’s legal fees? Insurance company Governed by policy Depends on the policy Employer
Are benefits protected by a guaranty association? Yes Limited No No
Can aninjured worker win judgments for pain and suffering and punitive damages? No Yes, up to certain limits Yes, up to certain limits Yes, up to certain limits

ERA is a professional employer organization that provides workers’ compensation coverage to its client companies. If you have any questions about workers’ compensation or what we can do to assist you, please feel free to contact us at (214)739-0695 or visit our website at www.erapeo.com.

The Cost of Unemployment

As reported by Sara Murray in her blog for the Wall Street Journal, our nation has totaled “nearly $19 billion in state unemployment benefits paid in error during the three years that ended in June [2011].” Is this staggering figure worrisome to you as a business owner? The article also states that the majority of the benefits paid in error were due to “recipients claiming benefits even though they have returned to work.”

If you struggle with unemployment claims, ERA can help you a great deal. As a co-employer with several business owners, we fight claims diligently to keep our unemployment rate down. As a small business owner, you don’t have the time or the resources to investigate claims and make sure your previous employee is actively looking for other work, or is perhaps already working (and receiving compensation) for another employer.  We do. We have a fully staffed human resources department who follows up on each claim to make sure you don’t have to pay fraudulent claims. Now, more than ever, as unemployment continues to be extended, it is important that you are able to manage the claims being filed against you.

Reducing the risks and costs of unemployment claims is just one of the areas ERA can help you not only save money, but more importantly, refocus attention on core business projects and opportunities.

Contact us today to learn more.