| In this article we review one major service offered by | | | | Organization. Basically, when operating with a PEO the |
| Professional Employer Organizations; Workers Comp | | | | employer operates under the PEO's workers comp |
| Insurance. | | | | policy. So if a claim is filed by an employee, the claim |
| Like other articles we've produced regarding | | | | hits the PEO's policy, not yours. It is not only the PEO's |
| Professional Employer Organizations, we take a | | | | job, it is financially in their best interest to manage all |
| general standpoint. Every PEO is arranged differently, | | | | claims efficiently, and more importantly, to instill best |
| and therefore how they deliver service varies. | | | | practices and perform risk management procedures |
| We also point out how each service we cover | | | | at your place of business. If an employer employs |
| pertains to coemployment, since this is the main | | | | moderately risky classification code , a responsible |
| concept that differentiates PEOs from all other HR | | | | PEO will perform a safety inspection at your facility to |
| Outsourcing providers. | | | | make sure you're doing everything possible to prevent |
| Workers Compensation Insurance | | | | workforce injuries. |
| Workers Comp Insurance is pretty cut and dry, when | | | | Another facet worth mentioning is that all Professional |
| you have W-2 employees, the government requires | | | | Employer Organizations have specific industries they |
| employers to purchase workers comp insurance. | | | | target. Some focus primarily on white collar business, |
| PEOs capitalize on their economies of scale, and can | | | | while some focus on grey or blue collar businesses. It |
| most likely provide workers comp at a discount for 9 | | | | is not unlikely that a PEO will actually turn down |
| out of 10 small businesses. | | | | business from a willing customer if they do not fit their |
| Workers Comp insurance provided by PEOs is a "pay | | | | particular appetite for risk. It all ties into the concept of |
| as you go" system, which means the PEO calculates | | | | coemployment, and how the risk of each PEO client is |
| the exact amount of workers comp premium | | | | shared with the entire group. It doesn't make sense to |
| necessary for each individual payroll. Why is this good? | | | | put a roofing company, known for high workers comp |
| It helps companies, especially those with a huge | | | | claims, into a group primarily consisting of white collar |
| workers comp bill, improve their cash flow. It is a stark | | | | professionals that barely make a claim. So when |
| improvement from how a company purchases | | | | performing your due diligence, ask about what other |
| worker's comp insurance through status quo means, | | | | clients the PEO has. |
| namely, the deposit and audit system. | | | | For companies with a big worker's comp bill, PEO's |
| Coemployment Factor: The underlying concept we | | | | sometimes offer an incentive program whereby if you |
| covered in PEO Services 101, namely how | | | | have a good year with no claims, they return some of |
| coemployment effects a company's state | | | | the premium back to you at the end of the year, |
| unemployment rate, also applies to how workers | | | | we've seen this check equal up to 30% of the entire |
| comp behaves through a Professional Employer | | | | year's premium, you do the math! |