Changes to the federal white-collar exemptions are coming soon, with new rules expected to make more employees eligible to receive overtime pay. However, that isn't the only development affecting exempt versus non-exempt pay status. The last year or two produced numerous rulings on exempt issues that will keep payroll administrators on their toes. Here are the highlights of the latest developments on exempt issues facing PEOs and employers today.
If orange is the new black and 40 is the new 30, then job tryouts are the new interviews. Companies are quickly learning that even in this seemingly oversaturated job market, where dozens and sometimes hundreds of resumes are received for one position, finding that right fit can still be a bit of a challenge. Add to the saturated market the incredibly quick access to resume-building Internet sites and templates, and it doesn't take much for even the least qualified of candidates to appear to be rock stars on paper and get hired. It's only natural for companies to look to new and improved methods of differentiating talent and selecting the best person for the business. Many times, our clients look to us to shepherd them through these trends. With that in mind, there are a few things to look out for to ensure the job tryout process is a success.
It starts like this. A letter comes in the mail. It's from an investigator of the U.S. Department of Labor (DOL): "Dear Plan Administrator…Your health plan is scheduled for an investigation from this office…." For a PEO sponsoring benefit plans, that plan administrator is you. Attached to the letter, usually 'Attachment A,' is a laundry list of items and documents you are requested to forward to the DOL investigator within 10 business days to help the onsite field investigation, and which "may eliminate the need for an onsite visit entirely." The laundry list on Attachment A consists of documents relating to your health and welfare benefit plans, including your plan documents, summary plan descriptions (SPDs), summary of benefits and coverage (SBC), contracts with all carriers, sample certificates of coverage under the Health Insurance Portability and Accountability Act (HIPAA), copies of written procedures for enrollments, claims denials, 5500 filings over the past four years, a copy of the plans' internal claims and appeals processes, and much more.
Results-oriented workers' compensation programs such as large deductible policies and captive insurance programs can be financially rewarding for PEOs, if run properly. Controlling the cost of claims when they inevitably occur has always been vital to the outcome of a successful workers' comp program. Today's emphasis on programs that allow the PEO to participate in the financial risks of their workers' comp programs force them to continuously examine ways to control claims costs. There are, of course, two parts to managing claims costs, and, if done properly, they are interrelated.
As we loaded two buses and made the trip to Capitol Hill during NAPEO's 2015 PEO Capitol Summit for our annual day on the Hill, I was reminded of how far we have come over the years. It wasn't all that many years ago that NAPEO members would hail a taxi from the hotel to journey up to the Hill for a congressional visit. The task at hand was to educate legislators about the PEO industry and thank them for support of the Small Business Efficiency Act (SBEA). This activity would happen throughout the day as, one by one, NAPEO members made their trips and reported back later on their successes.
We kicked off as we always do with a Board of Directors meeting where, among other business, the board approved the outline of our strategic plan, which will dictate our course over the next few years. The three key pillars of the plan are Advocacy, Marketing/Communications, and Education. While education was not in the prior strategic plan, the Strategic Planning Committee is asking for a renewed focus in this area, with emphasis on educating members about the Small Business Efficiency Act (SBEA) and industry best practices. NAPEO has always prided itself on and touted as a benefit the education it provides to its members. More info will follow.
Since 1998, NAPEO members have been visiting Capitol Hill as part of the PEO Capitol Summit (formerly the Legal and Legislative Conference, and before that, Government Relations Day). Starting in 2013, NAPEO carved out an entire day of activities on Capitol Hill for members to visit with their representatives and senators and to hear from leaders in Congress on key issues.
The PEO Index is once again indicating continuing strength. The correlation between the index and gross domestic product (GDP) remains high, so as flattened GDP has occurred in the first quarter of this year, so it has in the index. When breaking down the data by region, there is a growing disparity from its historical pattern. Texas, which has been the strongest region (after all it's like a "whole other state"), is showing some weakness. Florida, being a laggard for the last several years, is now showing renewed strength. Energy prices have fallen in half, thus adversely affecting Texas, while real estate continues to recover, thus benefiting Florida. Overall, the positive environment for PEO growth continues.
One of the principles our company was founded on is giving back to the community. While SimplicityHR by ALTRES has always participated in community service and charitable works, the company started a program two years ago that starts from the inside to make sure this principle is part of the company’s culture. The program, Mind, Body, Spirit, focuses on the well-being of our corporate employees, intellectually, physically, and spiritually.
Bob Adams recognizes the good fortune in being an entrepreneur. His mentor, board member, and investor, Jim Keegan, understands it's also a matter of recognizing an opportunity.
Challenge America's entrepreneurs to do the impossible, and they'll find a way to do it. The can-do attitude and spirit of enterprise written into our collective DNA have helped make the United States the most innovative and prosperous country on earth.