Business liability is a financial risk that can have severe implications for your company. While the actual threat of business liability might not be as imminent as it appears, it's still something that you should take seriously.
Thankfully, there are ways to help reduce your business liabilities by hiring a professional employer organization (PEO). A PEO is an independent third-party administrator that works with businesses to streamline and manage employee benefits.
By becoming a PEO client, you can reduce some of the risks from different types of business liability by outsourcing these responsibilities to them. So what exactly does this mean for you and your business? Let's take a closer look.
What is a Professional Employer Organization?
A professional employer organization (PEO) is a company that provides administrative services to other businesses, such as payroll, health benefits, workers' compensation insurance, etc. PEOs get hired by business owners who want to insource the administrative side of HR so they can focus on core business activities, such as product development and marketing.
PEOs are not the same as insurance brokers or consultants who may help you with one or two administrative services. Instead, they provide comprehensive administrative services and become your company's HR department. In other words, a PEO becomes the employer of record (EOR) for your company's employees so they can manage all of their HR responsibilities.
A PEO insources its clients' employees to businesses and pays a small administrative fee per employee to the PEO. Hiring a PEO allows companies to focus on their core competencies. At the same time, a PEO takes care of the administrative side of HR.
PEOs are essentially the EOR for all employees and are "vicariously liable" for all their actions. Therefore, if a PEO does not fulfill responsibilities to an employee, the company can be held responsible for such activities. PEOs can reduce business liabilities for clients by managing all of their HR responsibilities, including workers' compensation claims, general liability claims, product liability claims, and employee retention.
Reduce Business Liability By Insourcing Responsibilities To A PEO
When you hire a PEO to manage your human resources, they take on all the legal responsibilities that an employer would have. Responsibilities include managing payroll, benefits, and the legal aspects of hiring and terminating employees.
As a result, PEOs can reduce business liabilities for their clients by managing their HR responsibilities and taking on all liability for any employee actions. So, for example, if one of your employees files a workers' compensation claim, you don't have to worry about defending the claim or paying it out. You are free of claims because the PEO is the EOR for all of your employees.
PEOs are also responsible for managing your benefits, including health insurance, dental insurance, and vision insurance. PEOs allow you to reduce business liabilities related to health insurance claims and general liability claims related to health benefits.
At Cápita Works, we are responsible for all the legal and tax commitments of the staff who work for you. Our VAs get private health, dental, and life insurance, a VA training program, and on-demand training in our e-learning platform.
Help Improve Employee Retention and Recruiting
One of the biggest problems facing businesses today is employee retention. Unfortunately, many companies don't have the resources to offer comprehensive benefits to their employees. If you have a tight budget, a PEO can help.
Benefits can help improve employee retention by letting your employees know they are appreciated and valued by your company. In addition, PEOs also provide HR services to help with recruiting efforts. Our company offers a personalized recruitment process to find an employee that suits your business' needs.
Cápita Works can help you identify and attract top talent from Latin America to your company and make it easier for you to retain these employees. Retaining top talent can help improve business growth and make it easier for you to hit your business goals.
Help Reduce Worker's Compensations Claims
One of the employers' most significant risks is the potential for workers' compensation claims. Workers' comp laws make it easy for employees to file lawsuits against their employers.
One way to help reduce the risk of workers' comp claims is by hiring a PEO. PEOs are the EOR for all your employees, which means they manage your workers' comp claims.
As a result, they can help you reduce the risk of having false and fraudulent claims against your company. Reduced risk can help minimize business liabilities and make it easier for you to meet your state's workers' comp requirements.
Final Words
Business liability is a severe risk to any company, regardless of its industry. Fortunately, there are ways to help reduce your business liabilities, including by hiring a PEO. A PEO can help minimize business liabilities by managing your workers' comp and general liability claims and help with employee retention and recruiting.
PEOs like Cápita Works also have a US entity that provides employee insurance and mandatory benefits. Other benefits include social events and wellness programs, among other perks. If you wish to insource virtual assistants, you can read more about our solution here. For any further information, contact us.
