"When evaluating the employer role of either the PEO or the client, the facts and circumstances of each employer obligation should be examined separately, because neither party alone is responsible for performing all of the obligations of employment.
Each party will be solely responsible for certain obligations of employment, while both parties will share responsibility for other obligations. When the facts and circumstances of a PEO arrangement are examined appropriately, both the PEO and the client will be found to be an employer for some purposes, but neither party will be found to be "the" employer for all purposes.
Both the PEO and the client company establish employment relationships with worksite employees. Each entity has a right to independently decide whether to hire or discharge an employee.
Each entity has a right to direct and control worksite employees."
WHAT???!!!
So, let me get this straight, each party is responsible for some, both parties share responsibility for some but neither party is responsible for all, but then again each party can hire and fire employees independently of the other pary and each party can control worksite employees.
Does this sound a bit confusing? Isn't this the same as Abbott & Costello's Who's on First comedy routine?
How can a business owner manage their workforce when another party can come into the mix and independently fire one of the employees?
If I am in a PEO, what am I responsible for managing and what areas am I not able to manage?
How much am I being charged to not manage some things and manage others?
If you know someone in a PEO, have them take the time to look at what they are being charged versus what they can get on the open market.
Recently, we have found that some PEO's are charging more for group insurance than can be found on the open market. Others are totally and completgely ripping off their clients with exhorbitant workers comp rates. We found one that should be charging $0.39 per hundred dollars of payroll and they are charging $8.49. This amounts to a mod rate of 21.77 - there is no such thing as mod rates do not go that high. I wonder how it is possible for a PEO to charge this much for workers comp.
We have many more examples, so if you are in a PEO or know someone who is, please - for your own sake, take a look at the costs. The time to do this is now.
