The early hours of COVID-19 were extremely challenging: the uncertainty was terrifying, the rhetoric was schizophrenic, and the legislation was half-baked. But our industry faced those challenges with banners raised and swords drawn. The good news is that, over the past few weeks, we are seeing fewer COVID-19-specific questions and more of the business-as-usual existential crises. Let’s take stock of what we accomplished, what we are currently facing, and what we are likely to face going forward.
In 2006, Tarana Burke coined the term #MeToo and began a movement to fight against sexual harassment and sexual assault. This movement gained national and international attention in October 2017 when the New York Times broke the Harvey Weinstein story and several notable Hollywood actresses came forward via Twitter to confirm their experiences of sexual harassment.
Even though the pandemic has dominated everyone’s attention for most of the year, PEOs cannot afford to ignore recent changes affecting retirement plans, including new compliance issues. The Setting Every Community Up for Retirement Enhancement (SECURE) Act that Congress passed and the president signed in late 2019 includes more than 30 discrete retirement-related changes. Below we highlight some of the key changes that present significant new opportunities and threats for PEOs and mention some of the new rules that may require or warrant changes to PEO retirement plans or procedures.
On January 12, 2020, the U.S. Department of Labor (DOL) issued its final rule on joint employer status (the Final Rule), effective March 16, 2020.1 The Final Rule is the first restatement of the DOL’s joint employer regulations in more than 50 years and marked a material change to the trend set in motion by the Obama administration to broaden the joint employer doctrine.2Employers and their attorneys have expressed approval, agreeing that the new four-factor test, based on a test adopted in one form or another by several federal appellate courts, is a practical and useful tool that balances competing interests and is generally good news for employers and, in my opinion, PEOs.
Q: THERE IS A COMMON PERCEPTION THAT TRENDS IN EMPLOYMENT LEGISLATION TEND TO START IN CALIFORNIA THEN SPREAD TO THE REST OF THE COUNTRY. IS THAT TRUE?
A: Often, but maybe not as often as people might think. For example, California recently adopted the ABC test to determine independent contractor status and that has people thinking it might spread, but it was used in several other states long before California. Illinois led the way on biometric privacy, New Jersey was the first to mandate severance pay in layoffs, Washington implemented its mandatory retirement benefits law before California, and Hawaii and Massachusetts are early adopters of mandatory health benefits, just to name a few.
The launch of state-run automatic IRA programs in California, Illinois, and Oregon, has forced affected employers to navigate new state laws that require most employers to enroll their employees in the state’s IRA program unless they already offer retirement plans. Several other states are in various stages of following suit, leaving employers and industry stakeholders across the country watching to see where the next program could emerge.
As I sat down to write this article, I went back in my files to find the last time I provided a state update to the PEO Insider® audience and found an unpublished draft for the May edition. It was written in early March when things were much more fluid and NAPEO’s State Government Affairs (SGA) was proactively carrying out its annual plan. Then COVID-19 hit. The article was scrapped and that month’s edition was repurposed to address the pandemic. This pandemic is awesome, and I don’t mean “awe inspiringly ‘awesome.’” The catastrophic repercussions have turned the world on its head, but it has also allowed the PEO industry to shine.
Right now, our country feels more divided than ever. The election season has only increased that division. The 24-hour news cycle makes us believe that there are only two types of people in the world, who are polar opposites and unwilling to come together.
In actuality, we have more in common than not. Now more than ever, we need to remind ourselves of the ways we are alike and surround ourselves with people who work for a common goal.
PEO Win in Texas • Commercial Real Estate Trends • PEO Anniversaries • Diversity in Hiring
If the headline wasn’t catchy enough to grab your attention, then how about, “Continued revenue growth should not be left to chance.” Now do we have your attention?
Regardless of the business you are in, if you are dependent on your profession to earn a living—like 98 percent of us are—then you should ask yourself: Why doesn’t government affairs play a bigger role in our business?
Today our industry faces organized, motivated, and well-funded opposition in many jurisdictions. It’s more important than ever that PEOs stand together with NAPEO and fellow members, both PEO and service partner. While our industry’s opponents may say disparaging things, when we stand together we can refute these attacks with the truth.
This year marks the 30th anniversary of the Americans with Disabilities Act (ADA). The ADA was amended in 2008 and remains an important law for employers to understand.
In the early days, insurance companies that provided workers’ compensation programs to the PEO industry had only two options for risk financing: assigned risk/state funds and large-deductible plans (only one carrier wrote this option).
To say that 2020 has been a year like no other before it would be a gross understatement. Personal and professional norms have been turned on their ear and traditional approaches to most everything have had to be reconsidered or, at a minimum, reevaluated. Volumes could, and likely will, be written about the responses and results by businesses during these times. The ripples in the waters of how businesses now approach and conduct their day-to-day operations will inevitably be felt for years to come.
As we begin to close out the year 2020, none of us could have anticipated the obstacles and difficulties the year brought us. COVID-19 rocked our nation to its core. However, despite the immense challenges, our resilience shone through. We celebrated our everyday heroes, first responders, front-line workers, and the essential employees who selflessly persevered.
The PEO Employment Index is likely one of the most important economic indicators during the highly unusual circumstances of this pandemic. The general shutdown of Q2 carried through to include Q3. Figures 1 and 2 below show this disruption.
NAPEO 2020, our virtual annual conference, is well behind us now, but we received some good feedback from the attendees:
• Overall: 97 percent of attendees agree that their conference experience was positive and met or exceeded their expectations;...