Archives January 2011

PEO Pros / PAY-surance HR has been selected for a local award.

January 7, 2011. MAITLAND, FL
An Orlando survey company, ST Marketing out of Maitland, has notified PAY-surance HR that they are the recipients for “Best Payroll Consultants in Central Florida.”

“PEO Pros / PAY-surance HR was chosen from a field of 23 Payroll Consultants in Central Florida as they excelled in all categories” a spokesperson for ST Marketing tells us. “They were chosen ahead of local branches of ADP, Paychex and Compupay, three national firms considered to be front runners in this competition.”

They shared with us some of the award research process:

“We had seven core values to examine, and we did this by contacting existing clients and ex-clients. It was particularly important that the ex-clients spoke about the seven core values. While we will list all of the values in our upcoming news release, you can be sure that professionalism, flexibility, pricing and on-time performance were considered.”

Award Ceremony has not been scheduled but it is most likely going to be in March 2011.

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“I hear people talking about their SUTA, what is it?”

“The state just raised my SUTA rate! What can I do?”

“What can I do about SUTA?”

“My Accountant just told me I should consider a PEO because of my SUTA rate increase.”

Have you wondered what this acronym stands for?

• SUTA = State Unemployment Tax Act. Similarly,
• FUTA = Federal Unemployment Tax Act.

It is a tax assessed on employers to fund unemployment benefits. It is often (wrongly) called “Unemployment Insurance” or “SUI.”

The term SUTA is often used to refer to the employer’s SUTA rate, that is, the percent of payroll that is assessed on that particular employer.

Most states start new businesses at an arbitrary base rate, and they stay at that rate until a significant amount of employment history is acquired.

In Florida, for example, a new business is assigned a SUTA rate of 2.7% of payroll for the first 30 to 33 months. After this, the rate may fluctuate up or down based on employer experience. The current maximum in Florida is 5.4%

In contrast, the FUTA rate is a constant 0.8% and does not change per employer.

Both rates have a maximum wage applicability. In Florida, the SUTA rate is only applied to the first $7,000 of each employee’s wages with that employer. (FUTA also only applies to the first $7,000.)

Why is this Important When Considering a PEO?

When an employer turns his employees over to a PEO (formerly known as an Employee Leasing Company) they now fall under the SUTA rate of the PEO.

Obviously, in some cases, this can be beneficial to an employer who has had an unusually bad experience with unemployment. It can also be of great assistance to have a Professional Employer Organization to direct the employee hiring and terminations in a way that limits exposure to unemployment claims.

In any case, transferring the responsibility of the Unemployment Claims from the client company to the PEO makes unemployment claims “somebody else’s problem.”