If you run one of the 30.2 million small- to medium-sized businesses that the Small Business Administration (SBA) reports as operating in the U.S. today, you know that there are complex challenges that must be met to keep your business running. Sometimes, these challenges can feel overwhelming for a business owner to handle on their own. This is why many business owners turn to professional employer organizations (PEOs) to help solve many of the HR problems that arise with a growing business.
One area that many small businesses struggle to handle is workers’ compensation claims. Fortunately, a PEO can offer the tools and expertise about workers’ compensation that many business owners lack.
Understanding the Co-Employment Obligations of a PEO
When you partner with a PEO, you sign a contract known as a co-employment agreement. This co-employment agreement allows the PEO to carry out certain HR functions, as it becomes the employer of record for your employees. You remain in control of the operation of your business, and the PEO takes control of a few aspects of the business related to the handling of your employees.
Depending on the specifics of your arrangement, the PEO will typically handle payroll, benefits administration, and risk management. Because your employees are also considered employees of the PEO, they can receive access to higher tier health insurance packages that are offered to employers with many employees.
Likewise, PEOs can get access to high volume discounts on workers’ compensation insurance. This cost savings can greatly affect what you pay in insurance premiums each month. Depending on the PEO and your business, you may even see an elimination of the down payments your business would have to put up for workers’ compensation insurance.
PEOs Manage Workers’ Compensation Claims
As part of the co-employment agreement, a PEO will help make sure you’re in compliance with major laws from both the federal government and state governments where your business operates. When your business spans across state lines or involves frequent employee travel, compliance with workers’ compensation laws can be a tricky endeavor. On top of any costs associated with the workers’ compensation claims, employers who aren’t in compliance with the relevant laws can face serious fines.
When you’ve signed a co-employment agreement, any workers’ compensation claims will go through the process set up by your PEO partner. The PEO will have a dedicated claims management team available to address any problems that can arise from the workers’ compensation claim. This keeps you focused on your business, rather than juggling the stress involved with making sure the claim is handled fairly and in compliance with the relevant law.
Working with a PEO Can Lead to Fewer Workers’ Compensation Claims
As the employer of record and responsible for much of the liability related to workers’ injuries, PEOs have a strong incentive to reduce the opportunities for workers to get injured or sick. Like larger companies, PEOs can offer their small business partners tools that they might not otherwise have access to. This can include:
- New safety protocols
- Employee drug screening
- Mandated worker safety courses
- Loss control procedures
These programs will make your workplace safer for both you and your employees. Implementing these policies can, therefore, result in fewer workers’ compensation claims getting filed.
Get Your Employees Back to Work Sooner
Your PEO partner will also likely help you establish a return-to-work program for any injured workers. They will help you arrange a modified work program when the worker is given permission from their doctor to return to work. This provides an opportunity for the employee to stay invested in your business while they complete their recovery.
Get the Right PEO to Assist Your Small Business with Workers’ Compensation Claims
The National Association of Professional Employer Organizations (NAPEO) reports that there are close to 1,000 PEOs operating throughout the country. These companies don’t all have the expertise or experience to handle the complexities of your business. Finding the right PEO can be as time-consuming for a small business owner as handling a workers’ compensation claim.
If you’re interested in finding a PEO partner to help with your growing HR needs, NetPEO is here to take the struggle out of your search. As a PEO broker, we have a national network of PEOs that can help you with your HR needs. We can refer you to a PEO with the professional experience helping businesses in your area and industry.
To get started with a free consultation, call us at (678) 376-1212 or contact us through the forms found on this website. Within 48 hours, one of our representatives will be in touch to help you find a PEO that can help handle any workers’ compensation claims that come your way.