Employee liability can be a complicated thing. Of course, your first priority is to take good care of your team members, but it may be unrealistic to expect you can turn enough profit to afford a potentially budget-busting claim or lawsuit. With this in mind, guidance on worksite liabilities from a qualified professional employer organization (PEO) could be the answer to relieving this administrative burden.
Let’s Talk Payroll
Your PEO becomes a co-employer, partnering with you to handle payroll services and compliance, as well as a menu of other HR administrative tasks. By outsourcing these functions, you can focus on running your business versus being mired in paperwork and other cumbersome duties.
- There are thousands of payroll regulations that demand compliance. Mastering them can be daunting, not to mention extremely time consuming. Yet, if you miss something, the result could be devastating to your bottom line. In a co-employment relationship, your PEO assumes this liability.
What about Health Insurance?
Working with a PEO can protect your business from costly increases to your health insurance and workers’ compensation costs. Because these benefits are pooled from many companies under one PEO, you benefit from the resulting economies of scale.
- If you lack expertise in managing group insurance and/or workers’ comp, this could drastically cut into your profitability. Your PEO may also provide risk assessments and safety training, which also help lower the overall cost of on-the-job accidents.
When it comes to workers’ comp, there are both direct and indirect costs. To summarize both:
- The direct costs are pretty straightforward. They generally include medical expenses and any indemnity, aka wage replacement, payments that need to be made.
- You may not realize all the indirect costs. These include wages paid to an injured employee for absences not covered by workers’ comp; expenses related to work stoppages that may result from an incident; overtime; time spent by supervisors, administrators, safety personnel and others to handle claims; hiring and training replacement workers; lost productivity due to work rescheduling and accommodating the injured person, and the cost to clean up, repair or replace any equipment damaged during an accident.
There could also be OSHA fines, third-party liability expenses, legal fees – and the immeasurable loss of good will. To top it all off, consider the impact a claim might have on your experience modification and insurance cost.
Avoid Costly Litigation
Employment practices litigation insurance (EPLI) protects your business in case any current or former employees decide to sue you. (Ouch. But you know it could happen …) Look for a PEO that offers EPLI to avoid the horrific consequences of litigation.
Want more info?
Lyons HR is one of the few PEOS in the Southeast accredited by the Employer Services Assurance Corporation (ESAC) and certified by the IRS. This means we maintain the gold standard for best practices and financial reliability. We’ll serve as a seamless extension of your in-house HR team to help you grow faster, lower turnover, and realize your business vision, day in and day out. Contact us today to learn more.