People & Culture

7 Ways That PEOs Help Employers Manage Responsibilities to Employees

July 12, 2023

For many businesses, it’s difficult to strike a balance between actually running the business and managing employee issues. Most employers prefer to focus on profit-generating activity than deal with tedious and time-consuming employee-management responsibilities. Here, we outline seven scenarios in which a professional employer organization (PEO) can help ease this burden and conveniently handle employee issues.

This article is an excerpt from a full blog on Read the complete post here. 

Running a business while simultaneously managing employee issues can be a major challenge.  

However, a professional employer organization (PEO) can help alleviate employers’ responsibilities to employees – many of which employers find tedious and time-consuming – and focus on reducing associated risks and liabilities. As a result, company ownership and leaders can focus on core business operations and strategy. 

Here are seven examples of when a PEO can step in to provide assistance. 

Employee Relations 

Whether it’s a routine, day-to-day employee issue or a problem that has escalated, a PEO can help to handle it seamlessly and keep your business out of legal trouble. Such issues include: 

Employee handbook. A PEO can develop your employee handbook that documents and explains all company policies and clearly communicates expectations. 

Equal Employment Opportunity (EEO). A PEO can help your business proactively avoid charges of discrimination or harassment. However, should you find your business facing an investigation with the Equal Employment Opportunity Commission (EEOC), a PEO can take the lead in communicating with the government, compiling required information and documentation, and deciding how to manage each charge to minimize negative consequences. 

Employee discipline. A PEO can guide you through the progressive steps in correcting these issues, including verbal counseling, coaching, and documentation of all incidences and meetings. If the issue does not resolve or escalates, a PEO can also advise on the termination process. 

Safety. A PEO can evaluate your current work environment, identify safety hazards and offer practical solutions to mitigate risk exposure. 

Workers’ compensation. A PEO can help you navigate the process following work-related injuries, including claims management and assisting injured employees in their return to work. 

Employee Leaves 

There are many types of leaves of absence available to employees – and just as many local, state and federal laws that govern these leaves. These include: 

  • Family and medical leave 
  • Paid sick leave 
  • First responder leave 
  • Family military leave 
  • Bone marrow donation leave 
  • Organ donor leave 
  • Victims of crime leave 

A PEO monitors available leaves and keeps up with the relevant local, state, and federal laws surrounding them so your business stays in compliance. Leave specialists within PEOs also keep track of each employee on leave, including the length of the leave and the status of their return to work, and oversee leave documentation. 

If your business operates in multiple states or municipalities or has remote employees who reside in distant areas, a PEO’s help can be critical in navigating the complex patchwork of different laws in the various locations where you have employees. 

COBRA Elections, Eligibility and Payments 

Employers are required to:  

  • Track whether current employees on extended leaves and former employees are making COBRA payments 
  • Send written notice if payments are late or missed 
  • Maintain awareness of how long coverage continues for impacted employees 

PEOs assist with the administration of COBRA benefits for qualified employees and ensure compliance with relevant laws. 

Background Checks 

State laws differ in how they approach the legality of criminal background checks and credit score checks. Some states don’t allow them at all or limit the number of previous years subject to the check, and some states don’t permit employers to use this information as a determining factor in hiring. 

A PEO can help you understand what’s appropriate and legal, so that your company operates consistently toward each employee and in compliance with all relevant laws. Whether you’re hiring a brand-new employee or moving an employee internally into a new role, PEOs have recruiting and employment screening professionals who remain knowledgeable on relevant laws and advise on recruiting and pre-employment screening practices. 

Payment of Unused Vacation Hours to Terminated Employees 

Some states consider unused paid time off (PTO) to be wages that must be paid to employees upon separation from their company. There are also differences among states in when employers must pay employees who have left voluntarily versus leaving as a result of termination. 

PEO specialists understand various state requirements and deliver guidance on minimizing liability – and even saving your company money over the long term. 

Unsuccessful Management 

Managers should be held to a higher standard at your company, as they:  

  • Serve in a leadership capacity 
  • Represent their company internally and externally 
  • Set an example for their team members 

When they don’t follow company policies, perform poorly or are ineffective leaders, they can become significant liabilities for your company, from reduced employee satisfaction, engagement and productivity, which can lead to retention problems, to employee complaints and lawsuits. 

Similarly to lower-level employees, development is important for managers so they have the necessary knowledge and skills to:  

  • Lead their teams more effectively 
  • Inspire direct reports to put forth their best work 
  • Achieve individual performance and strategic company goals 
  • Reduce legal risk 
  • Eliminate inadvertent policy violations 

A PEO can help to first determine where leadership and performance gaps may exist and identify development needs and then can assist in training managers. 

Workforce Analysis 

It’s critical to not only understand who the people are that your company has hired, but also how to evaluate and leverage this information and data to: 

  • Avoid legal trouble, such as discrimination 
  • Justify business decisions 
  • Predict workforce trends 
  • Avoid the financial costs and knowledge and skill losses associated with employee turnover 
  • Identify opportunities and plan for future growth 

A PEO can walk your company through this analysis and help you create an action plan. 

Learn more about how collaborating with a PEO and offloading some employer responsibility can benefit your business by reading the full blog here. If you’d like to learn more about how Insperity can help your business, contact Matt Sternberg or Gina Carvana.  

Insperity Logo
Lynne Klein - Insperity

Performance Consultant at Insperity