PEO's Help With Knowledge of Sexual Harassment Laws

One question employers need to be absolutely clear on is - When does harassment violate federal law?

Harassment violates federal law if it involves discriminatory treatment based on race, color, sex (with or without sexual conduct), religion, national origin, age, disability, or because the employee opposed job discrimination or participated in an investigation or complaint proceeding under current EEO statutes. Federal law does not prohibit simple teasing, offhand comments, or isolated incidents that are not egregious. The conduct must be sufficiently frequent or severe to create a hostile work environment or result in a "tangible employment action," such as hiring, firing, promotion, or demotion.

This is just one of many issues or situations an employer must mediate, if they don't have a PEO handling such issues. A PEO can make these matters much clearer, and knows, step by step, just how to legally and diplomatically handle these compromising, yet all-too-common occurrences.

The Burden on Business Owners Is Heavy When Not Using a PEO

There are a laundry list of things you must do as a business owner, should you opt out of using a professional employment organization. Some of the things you must do, in order to protect your legal standing as an employer are:

Establish Applicable State Income Tax Withholding Account(s).

If you are not outsourcing your Human Resources and administrative task by using a Professional Employer Organization (PEO) then you have responsibility for making the tax withholding and deposits for employees in each state where you have employees. View tax withholding requirements in your state .

Establish your Federal Unemployment Tax (FUTA) Calendar and Establish Deposit Accounts.

Use the IRS Tax calendar to establish your payment schedule. Use Form 8109 when you make your tax deposit at an Federal Reserve Bank for your area or another authorized institution. Calculate amounts (based on per period employee wages) and make payments per the schedule rules for your size company. See IRS Instructions for Form 940 - Employer's Annual federal Unemployment Tax Return for detailed instructions.

Establish your State Unemployment Tax Account - (SUTA).

When your company has employees, it has an obligation to contribute to the state Unemployment Insurance fund for each state where you have employees. Amounts are charged based on a percentage of each employee wages up to a capped wage amount. Amounts vary based on your state and your company's experience with your states UI system. View information about SUTA rates for new businesses . You will need to find your states unemployment insurance (SUTA) regulatory body and get instructions for establishing your account, determining your rating and making your quarterly payments. Most states now require employers with over 50 employees to file electronically. Click here to view a list of State Unemployment Insurance resources for your state .

Acquire Workers' Compensation Insurance Coverage.

Determine risk type for workers (workers compensation classifications) and shop for a Workers’ Compensation insurance policy. Purchase Workers' Compensation coverage and pay up front for at least six months of coverage. Learn about how workers' compensation insurance coverage is priced and how your coverage needs are based on the type of work being performed and the number of people you employ. In addition learn how your work comp claims will affect your work comp modification factor (also known as your experience rating or mod rate) which in turn affect the price you will pay for your policy. Visit this link for more information about the Workers' Compensation Insurance regulations in your state.

And that's just a partial list of the things you as a business owner (big or small) are responsible for when not using a professional employment organization. A PEO can alleviate much of the worry, and actually save you time and money in the long run.

The Four Major Areas of PEO Administrative Relief

There are many things a PEO, or Professional Employment Organization can do for your business. The first of four major areas of administrative relief is PEO payroll administration. This area includes:

Preparing and distributing payroll checks
Direct deposit of wages to bank accounts
Year end W2s and W3s
Payroll data maintenance
Federal, state and local withholding and tax deposits
Payroll related record keeping, audits, inquiries and verifications.
Response to I-9 inquiries
Reporting and job costing
Time clock management
Vacation and sick leave tracking
Payroll software management and accounting (GL) entries
Tax changes administration

The second area is PEO Workers’ Compensation Administration, and this includes:

Claims review and administration
Safety plan creation, administration and training
Report and document accidents
Work Comp billing reconciliation
Safety audits and reviews
OSHA Compliance
Annual policy cost reviews
Dividend plan reviews and audits
NCCI mod rate reviews


Third, there is PEO Benefits Administration, which covers:

Plan communications to employees
Benefits handbook creation and distribution
Annual enrollments and adds/drops
Eligibility tracking
COBRA compliance and administration
Plan discrimination testing
Flexible spending accounts (FSA) administration
Carrier payments and account audits
Annual plan cost reviews
401K administration, company matching and plan testing (highly compensated)
Section 125 (pretax) premium audits
Life Insurance (if offered) plan administration
Employee assistance plans (EAP) administration
Short term disability plan administration
Long term disability plan administration

PEO - Human Resources Administration covers these areas:

Legal assistance establishment and retainers
Review, draft and communicate employment policies
Create and publish legally valid employee handbooks
Manage insurance for Employment Practices Liability (EPLI)
Employment posters and notices
Unemployment claims administration
Background checks
Audit compliance with Wage and Hour (FLSA)
Audit compliance with ADA – Disability Act
Audit compliance with EEOC
Audit compliance with OSHA
Attendance audits
Employment applications
Applicant interviewer training practices
I9 compliance

The Invisible Millions: Inside America’s Employment Crisis

There is a great and pernicious irony going on today in the American economy (not the only pernicious irony, most likely) concerning the great gulf between available job openings and "unemployable" laid-off workers. This schism is a harrowing litmus test -- or stress test, being the popular term of late -- concerning our continuing slide into an economic void filled with spiking and dropping figures on a number of levels.

During the worst recession this country has seen in generations, there are 13 million people out of work, with 3 million job openings.

Try as recruiters might, they have, for some mysterious reason (which we will get to the heart of later on in this article), been unable to fill these 3 million job openings. That's more people than live in the city of Chicago proper. This figure is even more disconcerting than it first appears.

To put it bluntly, this is evidence of a sudden and tremendous shift in the US economy which has presented serious mismatches between workers and the available positions out there. Workers pink-slipped from such shrinking work sectors as construction, finance and retail largely lack the skills and training for jobs in growing fields such as education, accounting, health care and government. Concurrent with this trend is the worst housing bust in decades, which has left the unemployed frozen in place, due to the fact that they cannot move to get work because they can't sell their homes.

As bad as it is now, this severe mismatch will create bigger problems when the economy begins expanding again. First, the unemployment rate is likely to remain disturbingly high because many people who want jobs will lack the necessary qualifications. Second, inflation might pick up sooner than expected if employers are forced into bidding wars to recruit the few people who actually are qualified for the work. Additionally, if the unemployment rate remains high, it will put extra political pressure on Congress and the Obama Administration to put through quick-fix measures that could make matters worse in the long run, such as the return to a welfare state mentality, the cost of long-term unemployment benefits acting to deter recipients from being as "gung ho" on the job hunt as they normally would be.

Another danger is that the US labor market will inevitably become less flexible at a time when Europe's labor market is finally normalizing again. To stave off that situation, both employers and governments alike will need to step up retraining, if not flat-out subsidize the career advancement of its loyal workforce. In the meantime, workers and employers will have to accept harsh new realities, translated into lower pay for those starting new careers, and less than perfect fits for companies filling vacancies. All in all, an unsavory prospect at best.

The US economy has changed drastically over the past couple of years. faster, it seems, then the workforce can adapt. The Bureau of Labor Statistics offers a recent sobering report, which makes these realities more evident. In their JOLTS, or Job Openings & Labor Turnover Survey, there is a statistic called the job openings rate, which is the percentage of all jobs in the US that are unfilled -- an employer must be actively recruiting on the outside for the opening to be counted. On the last day of February 2009, 2.2% of all US jobs were open, 3 million all told. This figure is corroborated by the Conference Board's report of 3.2 million online advertised job openings as of March.

The JOLTS rate is down from 3% in February 2008, even though the surplus of unfilled jobs is smaller now than it was at the outset of the current recession. But, some decline is to be expected, though the surprise is how many unfilled positions there still are, given that, in the very same year, the unemployment rate shot up from 4.8% to 8.1%. And, just as the unemployment rate measures problems in the labor market from the workers' perspective, the job openings rate calculates the difficulty factor for employers trying to fill open slots. While economists generally focus on the unemployment rate, in many ways the job openings rate is equally significant.

Business Week magazine recently constructed a new measure called the "jobs misery index" in order to get a more complete picture of the labor market crisis. It's simply the sum of the unemployment rate and the jobs opening rate. This sum held at a stable 8% for years, including during the 2001-02 recession. Starting last spring, however, it began a steep ascent to more than 10%. The question is whether it will return to the 8% range when the economy "recovers", or remain high for years to come.

One reason the jobs misery index is so high is the housing bust has reduced Americans' mobility in a big way. The Census Bureau reported on April 22 that the percentage of the population that moved residences in a reporting period was the lowest since record keeping began -- in 1948. The Census found that homeowners were only one-fifth as likely to move as renters. The bright side of this scenario is that there remain pockets of persistent unemployment, such as North Dakota, which at 4.2%, has the nation's lowest unemployment rate. Sykes Enterprises, for instance, plans on closing a 200-person call center in Minot, ND on May 10 for lack of workers. Fast food restaurants there are putting workers on overtime to cover shifts. Could it be people are escaping to better opportunities? Low population in North Dakota?

Immobility sometimes comes down to being a matter of choice. Case in point: Dean Drako, CEO of Barracuda Networks, a security and network appliance company, has been hunting for months for a vice president of worldwide sales, as well as for other key positions. He gave up a coveted Friday night with his family recently, in order to attend a San Francisco mixer heavy on Ivy League job hunters at the posh University Club. Certain he could capture some interested talent, Drako handed his business card to a prospect who'd been jobless for six months. The person looked at Barracuda's Campbell, CA address and retorted "Oh, forget it, your location is undesirable."

Even those from such hard-hit cities as Detroit and Cleveland have passed up well-paying jobs with medical device firms in places like North Carolina, simply because they don't want to - or can't - move. Where moving isn't an issue, employers are nonetheless miffed by the difficulty of filling jobs when so many are out of work. Ask one Irina Lutinger, who is near her wits' end trying to hire laboratory workers at NYU's Langone Medical Center in Manhattan. The senior administrative director for clinical laboratories says 10% of the unionized jobs are unfilled, greatly slowing down patients' lab work. Lab techs earn from the mid-$40,000 to the high $60,000 range a year, with good medical benefits and four weeks of vacation. Is that attracting career switchers who want to get retrained and take the licensing exam? "We haven't seen it yet here," answers Lutinger.

Labor advocates don't buy the argument that the US is suffering worker shortages. They say employers simply aren't willing to pay enough to attract the right workers. The shortage of primary care physicians that President Obama has been talking about would likely work itself out if primary care doctors were paid anything close to what specialists get. Higher pay is no panacea, however.

Some jobs require specialized skills for which no amount of money will generate higher labor supply until a new generation can be trained. The demand for accountants, for example, is likely to stay strong even after the current financial crisis is abated. As for now, "the restructuring business, bankruptcy attorneys...they are incredibly busy. And it's not as if you can all of a sudden invent these people," says Brian Sullivan, chairman and CEO of CT Partners, a New York-based executive search firm.

Wall Street giant IBM is feeling the heat of the skills mismatch problem as it changes its focus to services and data analysis. On April 28, 2009, "Big Blue" announced plans to add 4,000 specialists in analytics. It is spending some of its $1 billion-a-year training budget retraining as many of its current employees in hopes of retaining as many of its workforce as possible. But IBM is still laying off thousands of people who simply have no place in the "new" company, sadly.

Good help can be hard to find at the bottom end of the pay scale as well. In Maryland's Dorchester County, where the jobless rate is a whopping 11.5%, crab processors are trying to fill 300 jobs that pay $6.71 to $14 per hour depending on how fast people can pick meat from crab shells. Most of the work is done by Mexican women on temporary work visas. Crab companies held a job fair in early April, but only two locals applied. "People don't want to go back down the economic ladder," says Bill Sieling, executive director of the Chesapeake Bay Seafood Industries Assoc.

Some light at the end of the tunnel: Obama's stimulus package improves US jobless benefits, though while justifiable on humanitarian grounds does make workers less eager to jump at the first, less ideal job offer. The housing bubble implosion has severely decreased mobility of unemployed workers. And the sheer length of the current recession is making jobless Americans less employable, says economist Laurence M. Ball of Johns Hopkins University. To fight against this lassitude, Uncle Sam is using $3.5 billion of the stimulus for training purposes, while boosting support for community colleges. Classes for factory workers seeking entry-level health care careers have shown some success.

The cold, hard truth is displaced workers may have to move down a few rungs on the job ladder as they adjust, switching to new careers because their skills are now irrelevant in their new roles. Many laid-off Wall Street financial strategists still haven't absorbed that fact. Says Fred Wilson, a partner in Union Square Ventures, a New York venture capital firm, "For them to take a job that pays much less, they have to make a meaningful change in their lifestyle, and that is an issue."

Employers need to bend a bit as well, and be able to recognize that the candidates they're seeking may not exist at all. More and more staffing consultants are telling employees that they must step up to the plate and implement proper training -- and retraining -- programs, which will only serve the best interests of employees and employers alike. Smart policies that take a realistic approach to the current macro crisis of the mismatched working millions facing disappearing or changing jobs seem to be the only foreseeable short-term answer to our economic woes. Washington needs to also step up concurrently, and regulate the mess that deregulation, overseas exporting of manufacturing jobs, and pure and simple greed have gotten us into in the first place.

Private Employment Agencies Continue to Be In High Demand Among Employers Worldwide

It may be a secret to some there has been substantial growth of so-called 'head-hunters' or recruitment consultants in recent years. As these terms suggest, these are private firms and agencies made up of recruitment consultants who earn their fees by meeting the job needs of organizations for specialist and senior managerial staff. Much of their work is carried on by means of an informal network of contacts, whereby they keep records of career profiles of people likely to be in constant demand, and obtain information about the needs of employers for openings to be filled. This method has shown its high value to the employer and employee clientele of these agencies.

Private employment agencies command the largest share of the market and are now quite well known to most people from personal experience at local offices and advertisements in the press. Local employment agencies deal with jobs that are clerical, junior administrative, shop staff, IT professional, etc. Another type of private agency concentrates on recruitment and, sometimes, the initial stages of selection of middle and senior managers or of professional and specialist staff in fields such as, law accountancy, engineering, etc.

Private employment agencies provide at times a very valuable service, especially in recruiting staff in situations where there is a shortage of the particular types of employees required. However, since they exist to make a profit, employers have to pay for any employees they may recruit in this way.

There are also some very definite pros and cons that have to be carefully weighed, especially when these private employment agencies are regularly used to assist in the selection of managerial or professional staff. The advantages are the specialist knowledge of the employment conditions and requirements in particular fields that an agency can acquire, and objectivity of view and skill in conducting the selection procedure. The main possible drawback in using outside assistance for recruitment and selection purposes is the agent's lack of first-hand experience of the cultural and environmental aspects of the organization's work and life.

But even so, PEO's continue to largely dominate the so-called "head hunting" business, and so have earned their keep among big and small employers alike.

San francisco Adopts Mandatory Health Insurance Plan

A health care idea that's been up and running in New York for years is getting a push forward in another major city.

Aiming to get more small businesses to provide health coverage to workers, San Francisco has adopted a plan that requires employers with 50 or more staffers to get insurance for each worker. Beginning this month, the rule holds true for employers with just 20 or more workers.

It's much like the plan prompted by New York State's Health Care Reform Act of 2000. Healthy NY, as the New York plan is known, didn't make coverage mandatory, but did use state resources to make managed health care available to small employers. This plan, which is also available to uninsured working individuals and the self employed, seeks to help small businesses who want to provide coverage.

But small business owners in San Francisco face a new financial hardship under their city's more aggressive plan. Small businesses there must pay a sum equal to $1.17 an hour for any employee working 10 or more hours a week. Businesses with 100 or more employees must pay $1.76 an hour per employee.

In April 2006, Massachusetts Governor Mitt Romney signed into law a broad new program requiring all citizens to obtain health insurance. The Massachusetts House and Senate both strongly approved this ground-breaking legislation on a bipartisan basis. The program's aim is to cover 95% of the state's 500,000 uninsured within three years.

Massachusetts' Mandatory Health Insurance program, which became effective on July 1, 2007, is touted as a national model to address the needs of the more than 45 million Americans without health insurance.

Of course, skyrocketing health care costs aren't a new threat to businesses. The National Association of Professional Employer Organizations found that 41.7% of employers reported feeling that health costs are the most serious challenge to their bottom line.

Those costs are especially hard for small businesses to absorb. A growing handful of San Francisco restaurants are responding to the city's new health plan by adding a health care surcharge of about $3 to $4 to every bill.

What are the options? How can businesses -- especially small businesses -- address the need for quality health care when costs sometimes outpace revenues?

One option gaining attention is consumer-directed health plans. With these, workers are provided with an employer-funded health savings account for general medical expenses, along with high-deductible insurance for unpredictable expenses.

Health savings accounts can offer a company a way to control costs and also get employees to take more responsibility for their own health. The use of a high-deductible plan along with a health savings account can actually be less costly to an employee than a traditional managed care plan.

The way a consumer-directed health care model typically works is this: Employees are provided with a health savings account paid for by their employer to cover common medical expenses. If the money in the account is exhausted within a 12-month period, employees then pay 100% of their medical expenses until they reach a predetermined deductible. Once the deductible is reached, traditional health care coverage kicks in and takes over the payment of medical expenses.

On the other hand, if all of the funds in an employee's health savings account are not used within a year, the money can be rolled over to pay for future medical expenses.