Despite PEOs being all about people, they still need a framework from which to operate. They couldn’t serve their clients and worksite employees without one. After all, the PEO needs a mechanism to store and process data, perform administrative and transactional tasks, and keep it all safe and secure. Meeting this basic need allows the PEO to serve its clients in many different ways, from payroll all the way to strategic HR and proactive personal service.
The point of the framework, then, is to support and enhance the relationship between the PEO and its clients and employees. This feature goes into depth in several areas that are vital to this purpose:
Marijuana is a hot-button issue for employers, and PEOs are increasingly tasked with navigating a complicated and rapidly evolving patchwork of state medical and recreational marijuana laws.
Currently, 33 states and the District of Columbia have legalized medical marijuana, and 10 states and D.C. have legalized the drug for recreational use. While the number of applicants and employees testing positive for marijuana has risen to a five-year high, recreational marijuana has—at least until recently—posed little legal risk for employers.
Disruptions: All industries face them as new products, services, and technologies seek to find more efficient and cost-effective ways to expand, create, and replace existing markets. In my book, “Go Slow to Grow Fast,” I address how converging technologies have an astounding impact on existing solutions...
As a startup PEO, choosing vendors is crucial to the successful launch of your company. Implementing a vendor selection process that works for your business is no different from implementing any other problem-solving process: The problem is that you want to start a successful PEO, but you need to develop an efficient and trusted group of vendors to help you get there.
I have really enjoyed writing The Inside Word column over the last 10 months. I have done my best to lace my ramblings with a bit of humor while providing some substantive thoughts from my observations of 40 years in the PEO industry.
Starting in September, PEO Insider will be reformatted, including reducing the length of this column. So, while I still have the word count, I thought I would hit on just a few things that have been stirring in my mind over the last year that I haven’t been able to get to in this space.
A month or so ago in this space, I wrote about the Form 5500 issue. You’ll recall that back in February, the U.S. Department of Labor (DOL) sent letters to some 100 PEOs informing them that their Form 5500 filings were not in compliance. The DOL is requiring multiple-employer plans (MEPs) to disclose their customer lists to them—which is fine—but then the DOL is making them public, which is not fine. The 100 PEOs the DOL targeted had sent encrypted customer lists with their filings, which the DOL found to be non-compliant.
Q. Over the past couple of decades, the idea of PEO has become increasingly mainstream. From a legal/regulatory standpoint, what changes has the industry seen?
A. In thinking about the past 20 years and perusing old issues of PEO Insider,® I am astounded by how much progress this industry has made in gaining state and federal recognition.
The PEO Index has shown weakness over the past few quarters as gross domestic product (GDP) has continued to strengthen. This is an aberration of the PEO Index and GDP being highly correlated.
What are your current impressions of the PEO industry? As a business owner, is using a PEO something you would consider?
We actually use a PEO and have for 10 years. It’s a beautiful position that your industry is in. Almost every business in the U.S. is small to mid-sized—people need PEOs. We want to focus strategically on what we do best, and HR is certainly not what we do best. Anything that can allow us to focus on our strengths is a hugely valuable partnership. I definitely see the need for PEOs growing.
Q. A client company of my PEO is interested in applying research and development tax credits against its payroll tax liability. How does that work?
A. The Path Act of 2015 made the R&D credit permanent and established a provision for qualifying small businesses to use all or a portion of their tax credits to offset payroll tax liabilities (up to $250,000 annually)....
I had the pleasure of seeing Dewitt Jones speak at NAPEO’s November 2018 Board of Directors meeting. Going into his presentation, I expected to see some of Jones’ beautiful photography and learn about some of the places he had visited during his time at National Geographic. I did get to see some amazing photographs and hear about incredible places, but that was only a small part of what Jones had to share.
“If done right, PEO is the only business I’ve seen where both sides win together,” says Matt Lowman, owner of Boerne, Texas-based Integrity HR Management.
A two-year-old company, Lowman’s PEO represents his second stint in the PEO industry. He’d always been impressed and intrigued by the concept, but found some aspects or common practices that he would do differently if he had the chance.
America’s veterans have put our welfare before their own in defending our country, often at great sacrifice. It’s not enough, then, to give them a hero’s welcome. They deserve our unwavering gratitude and support, especially when making the transition into the civilian workforce.