Can a PEO Assist with Deferred Compensation Plans?

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So, you’ve decided that you’d like to provide your employees with a deferred compensation plan. Now you’re just wondering if your PEO can handle that. After all, there’s no sense in bringing in another vendor if all employee management tasks can be managed under one great umbrella of cost-effective and efficient services.

Here’s the good news: PEOs not only minimize the time spent on administration and operating cost, but also provide solutions related to deferred compensation! The bad news is that options may be somewhat limited. Before dismissing the idea though, know that options for individual retirement accounts (IRAs) through your PEO will be plentiful. The reason we say “limited” when referring to deferred compensation plan options is because the general term of “deferred compensation” includes pensions and employee stock options – things PEOs don’t tend to specialize in or offer.

When it comes to retirement plans though, such as 401ks, PEOs offer:

  • Expertise: Trusted advisors to help you proactively manage your employees, and do what’s in your best interest from a tax liability perspective.
  • Risk Management: Help with avoiding compliance violations or tax violations.
  • Purchasing Power: PEOs help optimize your employee benefits by pooling together employees from other companies. This results in much stronger purchasing power than you’d have as a small standalone business and you’ll likely gain attractive retirement plan options!

In conclusion, PEOs provide a team of professional HR and retirement benefits experts to keep up with the ever changing laws and reduce your liability as an employer. If you’re looking for a deferred compensation plan outside of retirement, such as company stock options, you may need to recruit the help of additional professionals. Be sure to ask us for referrals!

Also, note that when shopping for a PEO or alternative service provider you’ll likely receive deferred compensation plan options that vary from one PEO to the next. Our dedicated staff of PEO experts at Employer Solutions Plus can prepare a custom analysis of proposals for you upon request, saving you time, money, and stress!

Call today to take the guesswork out of retirement options and find the perfect service provider for your organization and its employees, whether that perfect fit is a PEO or a standalone service provider! Employer Solutions Plus: 727-698-6207.

What is Deferred Compensation?

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New to investments? Trying to arrange something that’s beneficial for both you (the employer) and your employees? You may have stumbled upon the term “deferred compensation.”

A deferred compensation plan is an arrangement between an employer and an employee in which a portion of the employee’s compensation for work performed is deferred for payment to a later date.

Your first impression may be “why on earth would anyone not want the money they’ve earned right now?” But, there are a number of benefits to deferred compensation plans deemed eligible by the IRS. The most obvious is the deferral of tax to the date at which the employee actually receives the income.
Because they are not earning the income at this exact time, there is no federal or state liability for that portion of income. Also, by deferring some of the income, the employee may fall into a different tax bracket, resulting in a lower tax rate.

Upon retirement (or the future date of choice), the employee or the surviving spouse of a deceased employee then receives a periodic payment or lump sum payment based on their contributions over the years.

Examples of deferred compensation include:

  • Pensions
  • Retirement plans
  • Employee stock options

So, how do you know if your deferred compensation plan is eligible according to the IRS? You can refer to IRC section 457, which describes plans of deferred compensation available for certain state and local governments and non-governmental entities (tax exempt under IRC 501). Or, you can rely on a tax/investment professional or Professional Employer Organization (PEO) which we’ll talk a little bit more about next week.

For immediate questions or concerns regarding your workplace retirement plans or deferred compensation models, contact us at Employer Solutions Plus.

 

The Importance of Background Checks in the Healthcare Industry

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If you’re the owner of a medical practice, you probably have an occasional nightmare of compliance violations and liability lawsuits. Protecting your business is important so it’s only natural to worry about the Department of Labor (DOL) showing up to administer and enforce its 180+ federal laws.

But, as far as protecting your business is concerned, patient protection, compliance and the DOL aren’t the only components you need to worry about. You need to start (if you haven’t already) concerning yourself with your very own personnel: the people YOU hire. We’re talking about the office manager, accountant, nurses, doctors, technicians and more; what you don’t know about them can absolutely hurt your practice!

Here’s a statistic that may alarm you: the Society for Human Resource Management reports that 50 percent of all resumes and applications contain false or overstated information. As a medical practice, how can this affect you?

Well, let’s start with education. Education is a lot more important in the healthcare industry than it is in some other industries. A nurse or doctor lying about their education most likely means that they are inexperienced and unqualified to be treating your patients! This situation could easily present itself with a damaging lawsuit regarding negligent hiring if anything were to go wrong at your practice.

A candidate or employee’s alcohol and drug history is another especially important aspect you should concern yourself with as the practice owner– especially if the person is treating or interacting with patients.

What about office managers, accountants, and others within your office? Should you be that concerned with them? In short, yes. The U.S. Department of Commerce found that employee theft is the cause of 33 percent of all business failures. As a business that likely has access to expensive equipment, various medications, prescriptions and more, the likelihood of theft within your workplace is greater than ever.

It is for the aforementioned reasons that all businesses (whether you’re in the healthcare industry or not) should always conduct a background check before hiring a new employee. It’s a quick, inexpensive step that could potentially save your practice. Extensive background checks will uncover criminal history, education confirmations, credentials, licensing, drug and alcohol history, credit reports, motor vehicle records, reference checks, court records, and much more.

For the sake of your patients, but also for the sake of your practice, you need to conduct background checks! If you’re currently working with a PEO or outsourcing to a Company that provides HR and administrative functions, be sure to take advantage of background screening services. If you’re currently in need of a background screening service company to support your practice, contact our team. Employer Solutions Plus works with numerous companies within the industry and we’re happy to point you in the right direction!

For additional resources specific to the healthcare industry, visit our HR Solutions for the Healthcare Industry section.

Temporary Staffing Vs. PEO: Know the Difference

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You’re a business owner in need of help, and you know where and when you need help, but aren’t exactly sure who to call. In the PEO industry we get calls all of the time from business owners requesting temporary staffing solutions. And it’s vice versa in the temporary staffing industry; people call them looking for the support services of a PEO.

While there are similarities among the two industries, they are actually very different solutions. Let’s take a look:

If you’re in need of HR-related services such as employment administration, recruiting, hiring and firing, workers’ compensation, employee benefits, payroll, compliance, best practices, employee training, and performance management…..

A PEO (Professional Employer Organization) is an organization that offers a cost-effective and comprehensive approach to helping you manage your company’s human resources. Unlike a standalone payroll company, or benefits company, that assists with one single component of HR, a PEO offers a full suite of HR-related services.

PEOs permit business owners to focus on their core competencies, while leaving HR and employee management to the experts! Through this “co-employment” relationship, there is a separation of human resources, employee management and liabilities that occur; your employees work for both you and the PEO. Business and day to day activities go about as usual, but the PEO assumes all administrative functions, and more importantly, shares many of the liabilities associated with your business and employees.

If you are in need of temporary personnel…

Temporary staffing on the other hand involves the placement of human resources for non-permanent employment needs. The duration of the placement may have specific parameters or be undefined. Options include full-time staffing, part-time staffing and even temp-to-hire staffing which is the placement of a candidate within a company for an evaluation period. During the evaluation, it is determined whether the candidate is suited for the position.

Temporary personnel are available in a variety of industries and positions and many temporary staffing firms actually offer access to professionals within multiple fields. Examples include labor and light industrial, food services, hospitality, admin and clerical, and yes, you guessed it: human resources.

Temporary staffing helps reduce labor costs by adding staff when necessary to hit key deadlines, assist with busy seasons, or cover vacations and other absences. Bringing on these professionals also saves business owners a lot of administrative hours, as they are almost always insured by the staffing company and on that particular company’s payroll. No need for adding individuals on to your own payroll, adding them to your insurance plan, or setting them up as an actual employee of yours.

While temporary staffing agencies can provide HR personnel capable of helping with employee administration, hiring, firing and training, they do not provide the technology or complimentary services associated with HR including workers’ compensation insurance, employee benefits, payroll, and compliance. If you’re still in need of all of these complimentary components, a PEO is likely the better option, as it is a full suite solution.

To learn more about PEOs and other forms of outsourced HR solutions, follow our blog each week, or contact us directly at Employer Solutions Plus!

What Will My Employees Think of a PEO?

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The word “co-employment” occasionally scares business owners. Will I be giving up control of my own workplace? Will points of contact and communication methods change? What will my employees think of a PEO “stepping in”?

These are common concerns and as a business owner you certainly have the right to be concerned! While the term “co-employment” may sound a bit scary, let’s review a few things first!

You do not lose control over your business in a co-employment relationship. You will retain ownership of the company and control over its day to day operations.
On paper, as co-employers, you contractually share or allocate employer responsibilities and liabilities. The PEO will likely take responsibility for administration, payroll, taxes and benefits. Because a PEO may also be responsible for workers compensation insurance, they may want to focus on improving worksite safety and ensuring your company is continually in compliance.

We always recommend strong communication with employees at the beginning of a new PEO/co-employment relationship. It’s not a difficult transition for anyone within the workplace, but clear communication always promotes a positive working environment.

Many employees would never realize there was actually a PEO operating behind the scenes if it wasn’t for their paycheck. Because PEOs take over payroll responsibilities, the checks your employees receive will likely have the PEO’s name on it.

The only other change they will notice is the number of advantages they now have because your company is associated with a PEO. These advantages include: streamlined payroll and claims processing, robust benefits, better communication and even improved job satisfaction through clear expectations, easy-to-read employee handbooks, and the fact that they’ve got experienced professionals on their side to handle employment-related issues.

If all fears are finally aside and you’re now ready to make the switch to a PEO, call Employer Solutions Plus at 727-698-6207. We can also answer any additional questions or concerns that you may have!