NAPEO: National Association of Professional Employer Organizations

April 2014
As far as business and service models go, PEOs are very diverse. With options including PEO, ASO, and HR consulting, PEOs, like Olympic decathletes, don’t have to do the same thing all the time, thus building overall strength, agility, and endurance.
    The diversity and options don’t end, there, either. Within each service line, options abound: delivery options, service options, a la carte options. These options mean PEOs can serve a wider range of clients, giving them choices for serving companies that may not perfectly fit PEO or that may want something different. Just as the decathlete can sprint, jump, throw, and run long distances, the PEO can meet a variety of client needs with no sweat...
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Final Pay-or-Play Rules
What You Need to Know Now

Seth T. Perretta, Esq. and Joel Wood, Esq.
On February 12, 2014, the Department of the Treasury and the Internal Revenue Service (collectively, the Service) issued widely anticipated final regulations under Internal Revenue Code (Code) Section 4980H—the so-called employer mandate, or pay-or-play, provision of the Affordable Care Act (ACA). Proposed regulations were released on December 28, 2012, and, in July 2013, the Service announced that this requirement would become effective in 2015 (not 2014, as was expected). These final regulations are, of course, potentially of enormous significance to PEOs and their employer clients, and there are a number of changes—and some important transition relief—that deserve attention...
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Group Health Benefits Waiting Period Regulations Released
Brendan Williams, Esq.
One of the latest trickles in the cascade of regulatory guidance concerning the Affordable Care Act (ACA) came February 24 when new final and proposed health benefits waiting period regulations were published jointly in the Federal Register by the U.S. departments of Health & Human Services, Labor, and Treasury (
    The regulations codify the ACA requirement that...

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legal currents
Screwdrivers, Golf Clubs, and Contracts
Selecting the Right One of Each is Critical

Ted N. Kazaglis, Esq.
Flat, Phillips, or square head screwdriver? Seven iron, eight iron, or nine iron golf club? PEO, ASO, or HR consulting client service agreement (CSA)? Picking the right tool for the job is critical in getting the job done efficiently, effectively, and to minimize risk. Understanding the uses of each, the circumstances where selecting one over the other is important, and the job to be done is the key to selecting the right tool. A wrong decision can lead to a stripped screw head, a poor shot, or increased liability risk...
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human resources
Practical Considerations for HR When Expanding HRO Offerings
How Does Offering PEO, ASO, and HR Consulting Affect the HR Function?

Erica S. Whyman, SPHR
Whether you began as a PEO, ASO, BPO, or some other O, many organizations have seen the competitive market advantages of expanding their business models to allow for different forms of what is typically considered the human resources outsourcing (HRO) umbrella. In a PEO relationship, there is contractual co-employment (as well as co-employment by virtue of common or statutory law), thus creating an employee-employer relationship. In an ASO/BPO model, there is no employee-employer relationship, shifting much of the liability to the client. While there is certainly a large difference between the two outsourcing solutions, there is overlap when it comes to the services they provide to their clients. It is not surprising that both PEOs and ASOs have moved toward offering HRO products, because expanding the business model offers increased options to prospects, much of the current back office is already in place, and these companies have the necessary skill sets to support it...
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Building the Business Case
Dave Rettig
What do we mean when we talk about building a business case? The phrase carries a multitude of interpretations and definitions, and there is no universal approach to guide us. I’ve trained large numbers of PEO sales professionals about how to incorporate this business case approach into their sales processes, yet I have never really tried to define it, until now.
   Building the business case in PEO sales is one way of strengthening the PEO model, which is...

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the inside word
Examining, Evaluating, and Recalibrating NAPEO’s Three-Year Strategic Plan
Mark C. Perlberg
2014 NAPEO Chairperson

“Plan the work; work the plan” is good advice for running a business. This maxim, however, does not mean the plan should be written in stone. As we in the PEO industry know from our own businesses, any plan needs to be flexible enough to allow for periodic evaluation and adjustment.
   Two years ago, NAPEO’s Board of Directors, Leadership Council (LC) chairs, and senior staff met in Bandera, Texas, for a retreat to begin the strategic planning process. The result was a three-year strategic plan, which is available at
    Now, two years into the plan,...

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napeo notebook
Lots of Good News for PEO Industry
Patrick J. Cleary
From February 10 through March 21, I logged something like 30,000 miles, including a few trips to Florida, a few to Texas, and one to California. Another trip to California ended up getting scuttled due to one of the many snowstorms we endured this winter. In last month’s column, I talked about the FAPEO meeting and our Texas Leadership Council meeting; both states are hotbeds of the PEO industry. Along the way, as I mentioned last month, there was evidence of a strong and vibrant industry and of engaged members. This was obviously heartening to see firsthand...
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napeo advisor
Whistleblower Protections, I-9 Form, Overtime Exemption, Religious Attire, OSHA Injury Log Questions
William J. Schilling, Esq.
Q. I understand that President Obama has changed the rules about who is exempt from overtime pay. Is this correct?
    A. No. On March 13, 2014, via a memorandum, President Obama directed the U.S. Department of Labor (DOL) to propose revisions to the regulations regarding “white collar” exemptions to the Fair Labor Standards Act (FLSA). Specifically, the president directed DOL to...

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capitol comment
House Ways and Means Committee Chair Supports the SBEA
Thom Stohler
The Small Business Efficiency Act (SBEA)—NAPEO’s top federal legislative priority—has been included in the tax reform discussion draft.
    So, what exactly does that mean? The short answer: It’s a good thing.
    The long answer is more nuanced and complicated, but in the end, it is still a good thing—a very good thing...

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NAPEO’s First Chapter: Texas, Born of Necessity
Eddie Heinemeier and Bill Lange
It is said, “Necessity is the mother of invention,” and so it was for NAPEO’s first state chapter—Texas. The National Staff Leasing Association (now NAPEO) was formed in 1984 through the leadership of several industry visionaries and early adopters, including Kent Ahlswede, T Joe Willey, and Gordy Brown. The NSLA was formed to bring unity and business standards to a fledgling industry invaded by charlatans who were creating a lot of bad press.
    Meanwhile in Texas,...

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peo spotlight
Gordy Brown: 1988-1990 NSLA President
The Forces that Created NAPEO’s Educational Programs

Stephanie Oetjen
Three principles guided the founders of the National Staff Leasing Association (now NAPEO) when the association was formed in 1984: working proactively with regulators and lawmakers to establish a legal foothold for the nascent industry; educating members about professional operating standards, fiscal responsibility, and ethics; and creating a culture of information exchange and professional networking. The purpose from the beginning was to promote, educate, and protect the industry.
   All three of these values are still true about NAPEO, and in fact, each still serves as a pillar that supports NAPEO’s mission today...

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global insights
Saluting America’s Job Creators
Thomas J. Donohue
Small businesses are the backbone of the U.S. economy. They represent more than 99 percent of all employers, creating two-thirds of all new jobs and accounting for nearly half of private sector output. Each year, the U.S. Chamber recognizes America’s most exceptional small businesses. Here are the regional finalists for the 2014 Dream Big Small Business of the Year...
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NAPEO Medallion Partners
NAPEO Thanks its 2013 Medallion Partners
Diamond Partners

F.W. Davison and Company         Risk Transfer Programs, LLC        
Platinum Partners

Artex Cedar Hill         Compass Consulting Group, Inc.         Humana         MassMutual Financial Group         McHenry Consulting

Summit Software         ThinkWare Corporation         Transamerica Retirement Solutions
Gold Partners

ALLInsurance Solutions Management, LLC         Avalara         MetLife         PayPlus         Pinnacle Financial Services
Silver Partner

eflexgroup         Fisher & Phillips LLP         Human Resources Mexico, S. de R.L        
Bronze Partners

Capital Alliance Corp.         Comply Right Distribution Services         NetWise Technology

ResourceDirect         SaaShr / A Kronos Company         U. S. Risk Insurance Group, Inc.      

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