Tag peo vs paychex

Is it worth it to go get a workers’ comp exemption from the state?

“Oh I don’t need comp, I’m exempt.” Have you heard this before?

Perhaps it is best to start with a few definitions to clear things up.

In Florida, Every employer is subject to the workers’ compensation act, regardless of how many employees they have¹. The statute more or less states that an employer shall cover the expenses and lost time of any employee hurt on the job.²

An exemption from outside coverage is available from several states when there are certain conditions met, such as 1 employee or less, all employees are also 25% or more owners, etc. This exemption must be applied for, paid for and filed with the state.³

There are no “automatic exemptions.” No one is “exempt” by default. The state must approve the exemption.

Once an employer has received such an exemption, he or she is making a promise to the state that they will pay for all workers’ compensation claims with their own funds. In a phrase, they are “self-insured.”

Some employers argue that being self-insured is enough, since a lawsuit will only proceed against an insurance company. Please be advised that lawyers are aware that most small business owners have other assets, such as homes, cars, retirement funds, children’s college funds, etc. Since some collect a percentage based on what is recovered, it can be profitable to pursue private assets.

Exemptions No Longer Being Honored
Add to this confusion that many larger contractors and municipalities are no longer accepting workers’ comp exemptions in lieu of an actual policy. They have found that lawyers have learned to pierce the veil of an exemption and perform what is known as “climbing the ladder” to the actual contractor in the case of a sub-contractor injury. Exemptions do not protect the contractors.

So is it worth the fee ($50 to $100 for “construction” business based on the state) and the application to get an exemption? A small business owner may consider getting comp coverage instead. There are many options available, including direct policies, “pay as you go” polices from payroll companies (even Paychex and ADP are offering this now) or even the more extensive liability coverage available from a PEO (formerly Employee Leasing Company).

It is true that initially it would appear that an exemption is indeed cheaper. But as is the case with all insurance, consider this: What if something happens? What if someone gets hurt? What if the OWNER gets hurt seriously? Loses a limb or loss of an organ? A properly written and paid workers’ compensation policy will pay for all medical expenses, legal fees and up to two-thirds of lost wages for as long as the injury is in effect.

Choices: It’s left up to the business owner.
The business owner has a decision to make, to run with an exemption or to have peace of mind through a somewhat more expensive workers’ comp policy.
If a small business owner wishes to know more about exemptions, their relative uses and other options available, please use the contact form below.

The authors of this article had assistance from the members of The PEO Message, a Facebook group used to communicate within the PEO and Workers’ Comp industry. Specifically, thanks go to Doug Lilak, Christopher Yarn, Chad Filley, and Jeffrey Rendel for their valued input.

Notes:
From Florida Statutes Chapter 440
¹ 440.03 Application.–Every employer and employee as defined in s. 440.02 shall be bound by the provisions of this chapter.

² 440.02 (16)(a) “Employer” means the state and all political subdivisions thereof, all public and quasi-public corporations therein, every person carrying on any employment, and the legal representative of a deceased person or the receiver or trustees of any person. “Employer” also includes employment agencies, employee leasing companies, and similar agents who provide employees to other persons. If the employer is a corporation, parties in actual control of the corporation, including, but not limited to, the president, officers who exercise broad corporate powers, directors, and all shareholders who directly or indirectly own a controlling interest in the corporation, are considered the employer for the purposes of ss. 440.105, 440.106, and 440.107.

³ 440.05

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People ask us when they need a PEO, or even why?

Hard question to answer with anything other than “Maybe you don’t!”

Our staff can spend a lot of time telling you why you should have a PEO, and you can probably find some of that on other parts of this site. For fun though, and maybe for educational purposes, we asked them, “When DON’T you need a PEO?” Well they tossed it around the bullpen and surprise surprise, they came up with at least 7 scenarios when a PEO is not called for.

Here’s some situations they gave us when you DON’T need a PEO:

1: You don’t have any employees
2: You have employees but they cause no problems and create no risks
3: You are a government entity who cannot be sued
4: You are a very large company with an internal legal and HR department
5: You are a very large company with annual workers’ comp premiums in excess of $250,000. (In this case you should have your own, custom comp solution, such as a captive or a self funded plan. Ask us about that)
6: You are a short term company, not likely to be around for a while
7: You will never want to sell your company, or facilitate an easy ownership transfer

Can you think of some others? Please let us know!

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Mike and Starr Mackey

“The first time I even thought about W-2s this year was when our personal copies arrived in the mail” Destinations Unlimited Tours owner Mike Mackey tells us. “It’s a tremendous relief not to worry about that and other HR issues like payroll taxes and workers’ comp insurance. I’m so glad PEO Pros found us a good match for our PEO services.”

Mike and Starr Mackey, pictured here, are the owners of this combination travel agency and charter bus company.

“We like to work with tour groups. Schools, churches and other common interest groups can have us take them to the cruise ship, the big game, or even a safe tour of New York City. We take them to the best restaurants, best hotels, and all of the details are taken care of.”

“The PEO relationship has enabled us to provide proper insurance coverage to work with public schools, department of defense and other heavily regulated agencies. Workers’ Comp was always a black cloud that hung over our head before. Now it is somebody else’s problem.”

“We even have a ‘Magical Mystery Tour’ where the guests are only told how much money to bring, and when they will be back. I’m not going to spoil it by telling you where we are going this time, but we have gone to places like Mobile, AL and toured the Navy Museum, stopped in Panama City Beach for some sun and white sand, and even hit some breweries and wineries along the way. It’s one of our most popular tour packages.”

“Folks enjoy taking us to the cruise ship, because the vacation begins when they step on the bus, and doesn’t end until they get back home. No driving to Miami or Fort Lauderdale. No parking worries. No traffic. Leave the worries to us!”

Destinations Unlimited Tours has been a client of ours since 2008. They have recommended our service to some of their friends in the industry, the best testimonial a client can give!

“We recently had a worker who was out on sick leave” Starr Mackey tells us. “It was so nice to simply make a call to the PEO and find out what we needed to do. They are always only a call or email away.”

Debby Boote

“On a personal level, I like it because we have direct deposit and my money goes right to my bank account” says Debby Boote in Business Development. “And on a business level, I like it because if there is ever a problem or a question I can go to the PEO and they are always there to help out right away.”

Here is a video featuring Mike Mackey, Starr Mackey and Debby Boote from Destinations Unlimited Tours:

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.

For more information please use the contact form below:

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Would it comes as a surprise that small to medium business owners are dealing more with unemployment issues these days? Wouldn’t it be great to hand those problems off to someone else?

With the services of a PEO, where the PEO becomes the “employer of record”, it is no longer the client’s responsibility to deal with unemployment issues (such as claims and UE taxes.) That all becomes “Somebody Else’s Problem” (the PEO’s) and the client can continue to build their business.

Allan Jackson, owner of Southeastern Data, explains (in the video below) how a PEO got rid of his unemployment problems in the video below. Southeastern Data is entering their third year as a client of a PEO (placed by PEO Pros.)

This article was published in “The PEO Insider” in January 2010. Reproduced here by permission. If you click on the images they may just give you a clearer view.

The PEO Insider was doing a special issue on brokers and called on me. I was flattered of course! I know we do some brokering but there are many larger “broker houses” than ours. Stephanie Oetjen, the feature editor, told me that I was considered to be a “high visibility broker, with a significant internet presence.”

Well who could resist that kind of schmoozing. After several edits and sessions with Stephanie this was the finished product.

Page 1 of The PEO Insider article January 2010

Page 2 of The PEO Insider article January 2010