Do I Have To Worry About Compliance?
A: The idea that only large companies need HR is a myth. If you have 1 employee, 95% of employment regulations apply to you. While it’s true that some regulations only apply to employers with 25 or 50+ employees, small employers are just as liable and likely to receive a lawsuit or employment compliance audit.
A: Successful HR and Employment Compliance requires more than just a handbook or a few forms. We provide a comprehensive HR package (the “HR Director”) designed to cover your employment compliance needs. In addition to materials, we provide phone support with expert HR Specialists who help you navigate the challenging and often confusing landscape that exists today.
Among the items included are:
- Customized Policy Manual and Employee Handbooks
- Job Descriptions
- Personnel Forms
A: Our materials are compliant at the federal level and at the state level for all 50 states including the District of Columbia. We create customized materials unique to your business, your particular state and the number of employees you have.
We do not have materials that are compliant with international laws, nor do we specialize in City/County regulations. Our HR Director allows for the inclusion of City/County policies and/or regulations. Employers should check with their local agencies about applicable laws. Employers with international employees should locate a specialist in international human resources.
A: Business owners must navigate a legal minefield of employment compliance regulations in today’s litigious society. Labor-related lawsuits are more common than malpractice or even sexual harassment lawsuits.
In addition to supporting your compliance with regulations, our materials help establish expectations with your employees. This prevents misunderstandings, “he-said-she-said” scenarios, assumptions and unspoken rules. This hold everyone more accountable.
A: Employee leasing companies (also called “Professional Employer Organizations (PEO’s),” and “co-employment” relationships) provide employees on a more permanent basis, unlike “temp” agencies. Your workers are employed by the leasing company. The theory (and marketing) is this relieves you of any liability related to employees. It’s not that simple.
Depending on the nature of the co-employment, there might be reduced administrative tasks. This may be offset by higher overall employment costs. The claim that liability is reduced can sometimes be true. Thus far, courts are usually holding both the leasing company and the owner liable for employment violations and lawsuits.
There are dozens of elements to consider, research, and document before entering a leasing relationship. Here are a few examples:
Day-to-Day Operations: while the employees belong to the leasing company, they still work as employees at your business. This means day-to-day HR management still falls to you. You or an office manager will need to correct unacceptable behavior, provide positive reinforcement, conduct performance evaluations, create work schedules, conduct staff meetings, hear employee complaints, and explain which issues you address and which the leasing company addresses.
Leaves of Absence: the leasing company may have hundreds of employees. This means more restrictive HR regulations apply that don’t apply to small employers. For example: if they have more than 50 employees within a 75 mile radius, they fall under the federal Family Medical Leave Act and must provide up to 12 weeks of job-protected leave per employee. If your practice currently has fewer than 50 employees, this will be a new leave that you have to work with. Other states have similar employee-threshold regulations.
Compliance: does the leasing company have the correct HR materials in place? Are employees filling out the correct forms, reading a current state-based policy manual, or using a job description unique to your practice? If they aren’t following HR regulations, the liability can partially fall on you. It is unlikely that you will be able to verify that they are in compliance.
Payroll: the employees belong to the leasing company but the co-employment relationship still presents liability for you if overtime, taxes, and benefits are not administered correctly. If the leasing company goes bankrupt and wasn’t paying proper taxes, the liability will shift to you.
Harassment: you may still be held liable for harassment claims that occurred at your business or if the leasing company does a poor job of handling the claim. Depending on the circumstances, the leasing company may hold you fully responsible for the harassment claim.
Benefits: depending on several factors, the leasing company may be able to offer better and cheaper benefits. However, this is not always true. Given your size, age of employees, years in business, your state, and other factors, you may be able to negotiate the same or better rates on your own. A good brokerage firm can be all you need. The leasing company may only offer the benefits in packages. If the package is more or less than you currently offer, you could pay more, or suffer employee dissatisfaction if the package is meager.
EPLI: Employment Practices Liability Insurance should be held by the leasing company. However, there would be a deductible and the coverage amounts may be spread over all the companies they lease with, leaving an inadequate amount for your business. If a lawsuit occurs, would you be able to choose your own lawyer?
Costs: the claim is often made that employers save money in these relationships. Employee leasing is a $90 billion per year industry, according to PEO annual reports. That money is coming from somewhere. They may charge you a flat % on each employee, or a higher per-hour wage per-employee. There are payroll fees, insurance administrative fees, and EPLI fees. Unlike running your own business, you lose the transparency of what these business functions actually cost. To set up a leasing relationship properly would require hours of detailed contract negotiating; consider the value of your time.
Bottom Line: if it sounds too good to be true it usually is. Be very careful and do your research. Think about how much control you want over your business operations; how much of your business’ success and liability do you want to entrust to another company? A company like Bent Ericksen & Associates can significantly reduce your HR-related stress and compliance materials burden, without a loss in control, and for significantly lower fees.
A: Our HR Specialists are Senior Professional in Human Resources (SPHR)-certified by the HR Certification Institute (HRCI). They attend continuing education events, perform research, and stay current on changing regulations. Unlike attorneys who have employment compliance as one component of their practice, our Specialists are 100% focused on HR and nothing else. They are true experts in their field and excel at resolving issues.
A: Our materials are updated 1 – 3 times per year depending on the frequency of regulation changes and legislative sessions. Our cloud-based software makes updates incredibly fast, with old and new policies viewable side-by-side.
What Are the Costs?
A: Included with the purchase of our HR Director:
- Personalized, updated policy manual
- Unlimited access to personnel forms
- Custom job descriptions
- Phone support with HR Specialists (4 hours for the first year)
- Product updates
- Unlimited access to the HR FAQ’s, our knowledge base of common HR questions
- Unlimited product technical support (via phone and email)
Not included in the HR Director purchase or the annual support agreements:
- Background checks
- BonusPro software
- Webinars (note: Comprehensive ASA clients have unlimited webinar access)
- DrakeP3 Personality Assessments
- Alternate Workweek Schedule (AWS) for California clients
A: The only purchase and total cost for the first year is the HR Director at $2,950.
After the first year you can choose between 3 annual support agreements (ASA’s) depending on desired phone support time and your HR proficiency: Limited ASA ($295/year), Basic ASA ($495/year), Comprehensive ASA ($995). Learn more about ASA’s.
A: We provide a large amount of assistance and education upfront to get you into compliance. This is not a self-setup relationship where you do the bulk of the work. We personalize your policy manual for you.
Since our Annual Support Agreements are so reasonable, it is easier to have one annual charge instead of 12 or more payments to track, enter, reconcile, and monitor.
A: We want our clients to be fully protected, which is why we don’t offer a la carte products. HR compliance requires several parts that all work together. It doesn’t help to have a comprehensive policy manual if you aren’t following wage and hour regulations. Having ADA-compliant job descriptions is fantastic; but if you aren’t following the federal and state paperwork regulations you are out of compliance, vulnerable to audits and lawsuits, and jeopardizing your assets.
How It All Works:
A: Typical setup and personalization times are about 3 weeks depending on how many benefits you offer and how quickly you review & respond to the drafts.
A: We pair you with one of our personalization consultants who will personalize your policy manual, tailoring it to your practice and the specific benefits you offer.
If you have specific HR compliance questions that the personalization consultant cannot answer, you will schedule a call with our HR Specialists.
After the policy manual creation and any applicable questions with the Specialists, you are a fully up-and-running client. We will alert you when updates are available and answer any technical questions you have.
A: Very easy! Simply call us, briefly describe the issue, and we’ll arrange the appointment. We can typically schedule you within 1 business day. If you are not on an annual support agreement the call will be charged as follows: $75 for the first 10 minutes and $5 per minute thereafter. When you arrange the call please provide a payment method.
A: In the world of HR compliance, you get what you pay for. A cheap generic policy manual can certainly be found online, but you will pay heavily in time spent researching the validity of the policies and making the custom edits yourself. Few policy manuals are state-specific, and most have outdated information.
A: Employment Practices Liability Insurance protects against financial hardship arising from a labor-related lawsuit. EPLI alone will not prevent a lawsuit or guarantee a judgement in your favor. In most cases, to obtain EPLI insurance you must show evidence of already being in compliance (this is demonstrated through documentation such as a current policy manual, personnel forms, job descriptions, and proper management practices.) All of these documents and practices are provided by Bent Ericksen & Associates in our HR Director.
Additionally, the annual premiums and deductibles make EPLI cost prohibitive compared to our services. It is not the silver bullet many employers think it is.
A: It is extremely unlikely that your attorney can provide materials as extensive as ours in a cloud-based system for a better price. Attorneys can certainly draft a policy manual and provide forms. However, the ongoing costs for the attorney to research all of the federal and state regulation changes, draft the new policies, update your materials, and answer your employment questions, will be far higher than our annual support agreements.
While it is comforting to have the word “attorney” on your materials, it is no guarantee of comprehensiveness nor is an attorney’s expertise required to provide solid HR compliance.
A: For serious issues, is it better to see a specialist or a generalist? If your accountant started offering medical advice would you stop seeing your doctor?
The HR landscape today is a serious challenge. HR Compliance is not an add-on or upsell for us; it’s all we do.
While the grass may appear greener, the experience working with non-HR experts involves incomplete materials, a confusing user interface, a very corporate customer experience, and the fees not as reasonable as expected.