Employment Law For Business Owners

Connie Laughlin

If you’ve put your human resource duties in the hands of your office manager here’s a simple test you to take. Do you know if your office administrator has the knowledge to protect you from employee litigation? Is this person a CPA and a PHR (Professional in Human Resources)? Do you know if this employee is up to speed on all the changing employee worksite laws? Does this person have ongoing annual training in all areas of these responsibilities?
I recently met a prospective client that said he was thinking about hiring an assistant to help with the task of human resource duties. I’m pretty sure that he planned to pay somewhere around $8.00 or less per hour. For about the same amount of money, or less, he could sign an agreement with a highly accredited Professional Employer Organization (PEO). Would you think it more prudent to hire a PEO that has 100's of years of combined experience and highly trained and certified professionals to handle every aspect of duties pertaining to worksite employees? Or, should he hire someone with general clerical duties, a.k.a. office experience?
We live in a world where simple job offers and termination letters could be turned into claims of discrimination or violations of an employment law. While it is true that employees are at-will, merely having at-will status does not protect the employer from a claim by a disgruntled employee. Every employer action taken, from written documents to disciplinary actions or termination, needs careful attention.
Wage and hour lawsuits are one of the fastest growing employment claims in the federal court system today. Employers might need assistance in properly classifying their employees as “exempt” or “non-exempt” for overtime purposes. It doesn’t cut it to say an employee is exempt if the company pays the employee on a salary basis; it’s based on their duties and responsibilities. You might need professional help to set policy on the time spent working before and after the workday. It does not matter if the employee was told not to work, it’s whether the company allowed the employee to work overtime hours. Review your break time and lunch breaks, too. If your employee is catching up on work during their lunch break, they must be paid. If that time spent results in a workweek over 40 hours, the employee must be compensated with overtime.
The list goes on – child labor laws, vacations, and paid time off policies, etc. It’s imperative to have a qualified person assisting you with payday laws, employee policies, proper disciplinary plans of action, and setting these standards via a legally compliant and frequently updated employee handbook. You are well served to seek guidance on how to properly and effectively manage employees. A quality PEO (Professional Employer Organization) offers this as part of their human resources outsourcing services.
It sounds like a no-brainer doesn’t it. The fact of the matter is many business leaders don’t know how the PEO services can provide effective and efficient human resources support and how their level of cost containment (the predictable cost for worksite employees) could be very beneficial to their bottom line.
Last year many organizations spent additional funds due to retention and recruiting, and expect to do the same this year. PEO’s help with processes to retain key employees and to recruit qualified applicants, these professional services are just part of the robust offering you receive.
Having a qualified PEO in your back pocket can sometimes help protect you from an unexpected or expected increases in state unemployment taxes, workers’ compensation insurance costs, health insurance (including other benefits and 401k) and any other litigation costs associated with having employees.
With a PEO, you’re not going it alone, once you’re on board you are part of a large pool of client companies. Claims could be dissipated amongst all clients therefore protecting you from the rising costs of workers’ compensation insurance. In addition, being under this umbrella of client companies could help overcome the problem of substantial increases in health insurance. How old are you employees? Are they aging baby boomers, or are they in childbearing years. Are you looking at any significant rate increases this year? Hmm, is it making sense yet?
HR costs for companies continue to increase, as the 2006 study of SHRM (Society for Human Resources Management) says that the average amount of human resource dollars spent per FTE (full time employee) is $1,200. Do you really know what your HR costs are? There may be more money going down the drain than you realize.
If the cost for worksite employees could be made a predictable cost, wouldn’t it be a wise decision to mitigate some of that risk by partnering with a PEO.
We live in one of the most litigious communities in our country and most employers in South Texas are still operating like their grand-pappy did 60 years ago. Protect your assets, ensure your employees are working in a safe environment, and make sure you’re operating efficiently so your focus is on revenue production. 
 
For more information on the most highly accredited and ESAC certified locally headquartered PEO call or email consultant Connie Laughlin at (800) 824-8367 or at conniel@uniquehr.com.