There are countless rules and laws at the federal, state, and local levels governing how a business needs to be run. Running afoul of any of these regulations can be financially costly and could even result in the shutting down of your business. Knowing about the most common non-compliance infractions is one step to reducing your risk.
However, keeping up with changing regulations can be a full-time job. For many small business owners without a background in HR or accounting, maintaining compliance to avoid infractions can be overwhelming. One solution to this problem many small businesses employ is to partner with a professional employer organization (PEO).
If you’d like help navigating the PEO industry, call (678) 376-1212. Our PEO brokers are standing by to help you understand what HR and accounting outsourcing solutions are available for your business and how they can help avoid costly non-compliance infractions.
Incorrect Wage Infractions
Paying employees properly is one area where many businesses struggle to remain compliant. Calculating payroll can be difficult for small businesses, especially those operating across state lines who may have to contend with varying state minimum wages. Add in varying income taxes and other required withholdings, like court-mandated wage garnishments, and you have a complex task that must be carried out properly and promptly. Repeated violations can be costly, and likely won’t do you any favors with your employees.
Using a PEO for payroll and benefits administration can help prevent wage-related infractions. When you trust a PEO to manage your payroll, you’re allowing dedicated HR professionals to make sure your employees are paid properly and that your company is compliant with all the relevant regulations.
Family Medical Leave Act Infractions
The Family Medical Leave Act (FMLA) allows employees who work for employers with 50 or more employees to take non-paid leave and remain employed and covered by group health insurance. Employees may be entitled to 12 or 26 weeks of covered leave, depending on the circumstances for the leave. Violations of the FMLA can result in employers being required to pay employees for time that was covered under the FMLA and pay that could have been earned if the violation never occurred.
Small businesses may not be aware when they come under the effects of the FMLA. When you partner with a PEO, you will have someone watching out to ensure your compliance. Your PEO partner will notify you when you reach the threshold and can help make sure your company follows the law properly.
Like wages, both state law and federal impact employers when they are recruiting new employees. California and other states have adopted “Ban the Box” laws which makes it a violation of state law to inquire about a person’s criminal history prior to a conditional job offer. Other states have made it illegal to request a person’s salary history during the application process.
PEOs can manage the recruitment process on your behalf. On top of maintaining compliance with all the relevant labor laws, your PEO can devise recruitment strategies, make job postings, and even conduct the first round of interviews on your behalf.
Employee Classification Infractions
There are many ways you might run afoul of the various regulations governing how your employees are classified. Should your employees be considered exempt or non-exempt under the Fair Labor Standards Act (FLSA) overtime rule? Do you properly distinguish between independent contractors and employees?
A PEO may be able to help you if you’re unsure how your workers should be classified. When you partner with a PEO, you will have the opportunity to evaluate how your workers are classified and make any adjustments that might be necessary to avoid the penalties that come from non-compliance.
NetPEO Can Help You Find the Right PEO to Protect Your Business
A PEO can help protect your small business from common non-compliance infractions, while also providing you with other HR and accounting services. However, there are more than 900 PEOs in the U.S. today, according to industry statistics compiled by the National Association of Professional Employer Organizations (NAPEO). Finding one that operates in your state and has the experience necessary to protect your company from costly non-compliance infractions can be a challenge.
Rather than let yourself get frustrated, call NetPEO at (678) 376-1212. You can also contact us online by using the form on this website. Our PEO brokers are ready to help you connect with the right PEO today!