NAPEO: National Association of Professional Employer Organizations

May 2015
Have you seen the YouTube video about the most complicated board game ever? Well, here's a sample of some of the game play:
Player 1: Everybody, start with picking a color and taking three cards.
New player starts to look at cards.
Player 1: Uh, don't look at them yet...Now, we roll the dice.
New player rolls dice.
Player 1: You rolled a 2. That means you get to roll the mega-die.
New player rolls the mega-die.
Player 1: You rolled a 14. That means you get three jumbo resource cards.
New player takes cards and starts to look at them.
Player 1: Ah, don't look at them yet...Now, we all grab items from the game chest that correspond to our item cards.
Player 1 lifts and opens chest and players take items.
New Player: I've got a Crystal Card.
Player 1 hands New Player a Crystal necklace.
Player 1: Okay, everybody provide two forms of identification: one for you in real life, and one for your character in the game.
New Player: I've just got my license.
Player 1: We'll, I guess we're playing with a Rodent Entrapment Expansion Pack then.
Players place Rodent Entrapment Expansion Pack on table.
Player 1: Now, swab your neighbor's mouth for a DNA sample...
    It goes on like this. After two minutes and 40 seconds, with time elapsing as the players wait for their DNA results and leave to retrieve a blooming elderberry from the north-facing slope of Mount Glocknerwad, the players have determined who gets to go first.
    You have to admit that this video is a pretty humorous allegory for how people in the PEO industry must often feel at the complicated, intricate, and sometimes contradictory local, state, and federal laws, rules, and regulations they must comply with to operate their companies and serve their clients..
    This PEO Insider® feature highlights several issues that are at the forefront right now for PEOs. So, go ahead and roll the dice, spin the spinner, and make your way through the complicated rules of PEO compliance...

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legal currents
The Accidental Employee
Robert C. Rice, Esq.
Every PEO has probably faced this situation: You run a detailed payroll report on the workforce covered by your PEO agreements and you say, "Wait a minute, when did we get an employee in Texas?" Or, even worse—today's mail includes a notice from the PEO licensing authority or the state unemployment agency in a state where you thought you had no worksite employees, telling you that you have two worksite employees in that state and informing you of an administrative penalty and fine...
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human resources
Clash of Wills
Aligning Company Policy with Law

Paula Watkins, SPHR
Revising company employee handbooks is becoming an ongoing, quarterly task as federal, state, and municipal laws, agency edicts, and court decisions impact our workplaces. Same-sex marriages are altering how we administer benefits. Legalized and medicinal marijuana can change how we handle workers' compensation claims. And, the impending details of executive actions on immigration could rock our HR worlds...
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risk management
Workers' Compensation Legal Issues in a PEO World
Cristine K. Huffine, Esq. and Amanda M. Conley, Esq.
The presence of PEOs is on the rise across all types of industries. With the recent passage of the Small Business Efficiency Act (SBEA), that presence will only continue to grow. The presence of a PEO in the employment hierarchy presents special challenges in the context of workers' compensation claims and we have found that many employees, their counsel, and their employers are still in the dark about what role the PEO plays and how it interacts with their workers' compensation claims. Dispelling some of this confusion is critical in ensuring that workers' compensation claims are handled as efficiently as possible and at minimal cost to both the PEO and the client employer...
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start-up guide
The Legal Piece of the Puzzle for PEO Start-Ups
John M. Polson, Esq.
Executing a PEO start-up from scratch is a major undertaking. A PEO start-up involves many interdependent moving parts executed by a variety of different professionals, not the least of which is the legal piece of the PEO start-up puzzle...
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the inside word
The Three Rs of the PEO industry
Brent R. Tilson
2015 NAPEO Chairperson

We all know the three "Rs" of elementary education: Reading, wRiting, and aRithmetic. In the PEO industry, we are all very familiar with our three Rs: Regulations, Rules, and Risk. Thus, it is no surprise that our membership survey results rank the NAPEO Federal and State Regulatory Database as extremely valuable to our members.
    We are an industry that both thrives on and wrestles with the never-ending regulatory machine. First, our businesses thrive as we provide our clients with the comfort and peace that our services allow them to improve compliance, mitigate risk, and follow rules that many don't even know apply to them. Yet, we also have the challenges of PEO regulatory compliance that require us to have state contract addendums, manage reporting requirements, and meet financial reporting standards. In addition, we must constantly stay abreast and ahead of what is coming next...

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napeo notebook
NAPEO's Best-Kept Secret for CEOs
Patrick J. Cleary
As you know, we at NAPEO do a ton of events every year—from local Leadership Council Forums and our annual PEO Capitol Summit here in Washington, D.C., to our Annual Conference and Marketplace, this year in Arizona. But, we also have a CEO Forum program, which is slightly less well known, given the exclusivity of it audience, and also has lower attendance as a result. However, the content is consistently terrific, thanks to the team here at NAPEO. I would have to say that my favorite CEO Forum is our annual trip to Palo Alto, California, each March, where we hear from some of the top business minds in the world. It's a fairly intimate gathering—about 25 CEOs—and has unintentionally become a bit of a well kept secret, but those who have attended will tell you of its tremendous value. We like to call it a "mini-MBA" in that over two days, attendees hear from three leading business thinkers, giving you real take-home information...
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NAPEO Working with Treasury and IRS on SBEA Implementation
Thom Stohler
NAPEO has taken the first significant step in the implementation of the Small Business Efficiency Act (SBEA). On March 18, NAPEO's legal counsel on the SBEA, Randy Hardock of Davis & Harman, LLP, submitted a letter on NAPEO's behalf to the top officials in the Department of the Treasury and the Internal Revenue Service (IRS) responsible for implementing the PEO certification program. This letter was in part a response to a series of questions officials from the Treasury and the IRS asked during the meeting with NAPEO on February 12, as well as a response to the request by Treasury and IRS officials to describe what NAPEO would like to see in a PEO certification program...
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up front
Fine-Tuning PEO Sales and Marketing Messages
Kerry Carruthers
As part of NAPEO's ongoing efforts to gauge small business attitudes towards the PEO industry and help members fine-tune their sales and marketing messages, we called again on nationally known pollster Bill McInturff and his company, Public Opinion Strategies, to conduct a nationwide online survey of small business owners.
    The survey was conducted December 11 to 22, 2014. One hundred and seven small business owners and operators participated. Participants had at least 15 full-time employees and a maximum of 120 full-time employees. Sixty-five percent of the survey respondents were business owners and 35 percent were operators. They had an average of 39 employees and had been in business for an average of 29 years.
    One key way the online survey differed from the focus group participants (none of whom had ever used a PEO or knew what a PEO is) is that 15 of the survey respondents either currently use or have used a PEO in the past. All of these respondents had a favorable overall impression of the industry.
    When asked to name the biggest benefits of working with a PEO, one business owner wrote...

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napeo advisor
OSHA Complaints, PEO Legal Status
Brendan W. Williams, Esq.
OSHA Complaints Can Now be Made Orally
In a final rule issued on March 5, 2015, the federal Occupational Safety and Health Administration (OSHA) changed the longstanding requirement that whistleblower complaints be filed in writing. In part, the rule was borne out of the large broom of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (as it had, in turn, amended the Sarbanes-Oxley Act of 2002)—again proving that the Wall Street crisis of 2008 continues to be a gift that keeps on giving for all employers, not just the financial industry.
    The final rule was improved from...

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capitol comment
ACA Implementation and Federal Regulatory Enforcement
Thom Stohler
OSHA Complaints Can Now be Made Orally
The implementation of the Small Business Efficiency Act (SBEA) is not the only activity of the federal government that NAPEO is following. While the Treasury and IRS work on SBEA implementation, Congress and the Obama administration continue their work, much of which could impact the PEO industry.
    Healthcare is the issue that won't go away. Congress continues to consider legislation on healthcare, such as proposals to change the Affordable Care Act's (ACA) definition of a full-time employee from 30 to 40 hours a week, or to repeal the medical device tax. If the Supreme Court in King v. Burwell finds that the ACA does not permit subsidies for health insurance in federal exchanges, Congressional Republicans are ready to move on legislation to...

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peo community
Paychex PEO: Passionate About Community Service
Lisa Jackson
"We provide outstanding service and build trusted relationships." Those eight words make up one of our six company values, and we live by that sentence here at Paychex PEO. It defines our employees' approach in business dealings, with one another, and it permeates outside into our local communities.
    When you think about it, a PEO establishes a relationship that is highly dependent on thoughtful service. Paychex PEO, headquartered in St. Petersburg, Florida, is no exception. We make it a priority each and every day to maintain our values and give back to our community. The St. Petersburg/Tampa Bay area is our home, and the overall health and welfare of its people and surroundings are extremely important to us.
    Our community service efforts begin with the "Paychex PEO Spirit Squad." This enthusiastic group of dedicated individuals really...

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small business perspective
Four Easy Ways to Attract Millennial Workers to Your Small Business
Kristen Lund
They've been lauded as tech-savvy and socially conscious, and maligned as entitled and narcissistic. Love them or loathe them, millennials are impacting the workforce in a major way.
    When it comes to recruiting these individuals for jobs, small businesses need to step it up, says NFIB member Ira Wolfe, president of employee assessment and testing firm Success Performance Solutions in Lancaster, Pennsylvania. "Companies need to recruit workers like they target customers," Wolfe says. "If I was shopping for a shirt, I'd have an opportunity to browse, chat, or call customer service. If I'm an applicant, I enter a black hole."
    Wolfe offers the following four tips for...

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peo spotlight
Landrum Human Resources, Inc: Britt Landrum, III and H. Britt Landrum, Jr.
Growing Up PEO

Stephanie Oetjen
On September 16, 2004, Hurricane Ivan made landfall in Alabama and northwest Florida. A category 5 storm as big across as Texas and with winds up to 165 miles per hour at its strongest, it hit the coast as a category 3 with winds of 120 to 130 mph. But still...
    AmStaff (now Landrum Human Resources, Inc.) was based in Pensacola, Florida, on the western edge of the Florida panhandle and less than an hour's drive from Mobile, Alabama, in one of the areas hardest hit by the hurricane.
    It is in a PEO's nature to protect its clients, its employees, and its data during such times, and as the counties in the area of landfall were evacuated, Britt Landrum, Jr., president and CEO, and Britt Landrum, III, chief technology officer, headed into work.
    "We had a big generator—the lights go out and it continues to run," said Britt Jr. "My wife and I got a blowup mattress and moved in. Britt and his wife and boys spent the night near the computer system. During the night, the wind was blowing. We had plywood over windows and had to put our backs to the door...

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global insights
The Truth About Capital Markets
Thomas J. Donohue
Five years after the passage of Dodd-Frank, there is still a vigorous debate in this country about the basics of our financial markets and the regulatory framework that governs them. It's an issue that incites passion and division, and too often, the truth gets obscured and the point of the debate gets lost in the noise. The point is that we need a financial regulatory system that works. The U.S. Chamber's Center for Capital Markets Competitiveness seeks to foster an honest debate based on...
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NAPEO Medallion Partners
NAPEO Thanks its 2015 Medallion Partners
Black Diamond Partners

Diamond Partners

Artex Risk Solutions, Inc.         Compass Consulting Group, Inc.

Massachusetts Mutual Life Insurance         McHenry Consulting

Risk Transfer Insurance Agency, LLC
Platinum Partners

MetLife        Summit Software         ThinkWare Corporation

Transamerica Retirement Solutions
Gold Partners

ALLInsurance Solutions Management, LLC         EAP Consultants, LLC

PayPlus Software, Inc.         Pinnacle Financial Services, Inc.

Stonehenge Insurance Solutions
Silver Partners

Barrow Group, LLC         Eflexgroup, Inc.

Fisher & Phillips LLP         Kronos SaaShr, Inc.
Bronze Partners

Capital Alliance Corporation         Holland & Hart LLP         Jackson Lewis P.C.

NetWise Technology         U.S. Risk, Inc.

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