“Growing the business” is the goal for most business owners. Expansion is a sign your business is thriving. However, if the business expands across state lines, or even if you are just starting your business and performing services or hiring workers across state lines, you can run into significant complications.
Employee management operations regarding hiring, payroll, and staying in compliance with state regulations can take up hours and hours of your time. Even if you take great care to get everything right, it is easy to make mistakes that can lead to fines or other penalties.
Fortunately, there is a way for multi-state employers to avoid these complications and potential consequences: reach out to NetPEO and find a professional employer organization (PEO) that will take on your business’s administrative needs.
What Does a PEO Do?
A PEO fulfills whatever administrative tasks you assign it through a co-employment agreement. You and the PEO are “co-employers” to your employee, so while you continue to be “the boss” of your business and your employees’ assignments and performances, the PEO can legally handle administrative duties such as payroll, training, risk management, and procuring employee benefits, to name a few.
Your co-employment agreement will document the responsibilities you have put under the PEO’s purview.
How Do PEOs Help Multi-State Employers?
Just as PEOs help single-state business owners, they also help multi-state employers, with one difference: they help multi-state employers even more.
The administrative responsibilities for a single-state business are time-consuming and require navigating through frustrating red tape. Adding more states into the mix increases the time requirement and frustration. Keeping up with each state’s specific laws, tax schedules and policies, and compliance regulations is an overwhelming responsibility with the added negative of taking your focus away from running and growing your business.
When multi-state employers partner with a PEO, they can put their attention back on their business while the PEO takes care of legalities.
Payroll Management
Often, your employees will pay income tax in their state of residence, not the state where your business is located. This scenario can create confusion regarding tax codes, labor laws for overtime pay, and other payroll issues. If you are not well versed in each state’s tax codes, you might face fines or see your brand’s reputation damaged.
PEOs have extensive knowledge of state tax codes and labor laws. With a PEO overseeing payroll duties, you avoid making costly mistakes. If the PEO does make an error, they absorb the fine, which means they have a financial incentive to perform their duties accurately.
Employee Benefits
Commonly, employee benefits, such as those for medical coverage, are state-specific. For employees working in states bordering the one they live in, insurance companies may have accommodating provisions in place.
However, if you have employees working in locations that do not share a state line, such as California and North Carolina, you would have to find and offer separate benefit plans for each respective employee. This is a time-consuming and costly effort, which can be alleviated if you take the much simpler approach of partnering with a PEO.
Under this partnership, the PEO would provide benefits packages on behalf of your business with access to a national network of carriers. Your PEO collaborator could provide these benefits no matter where the employee lives.
Compliance
The challenge of keeping track of and in compliance with federal and state-specific regulations cannot be underestimated. These regulations go deep “into the weeds” of hiring, termination, and most other labor procedures.
For example, some states require employers to give potential recruits pay and benefits details. Others have specific processes in place for how employees receive their final paychecks.
Your PEO partner will navigate these specific compliance issues for you, keeping all aspects of your business safely above board.
Workers’ Compensation Insurance
In most states, if you employ three or more workers, you must purchase workers’ compensation insurance to cover workers who are injured or become ill from on-the-job situations. However, states have their own methods for calculating workers’ compensation rates and costs, and some states only acknowledge policies purchased through a state fund. It is easy to see how your workers’ compensation costs could quickly run sky-high and how you could become confused by the nuances of each state’s reporting requirements.
Again, a PEO can take on this responsibility, saving you time and money. PEOs can “pool” their business clients, leveraging their large number of collective employees and making it possible for the PEO to purchase larger group plans at a scaled, lower cost.
NetPEO Finds the Right PEO Partner for Multi-State Employers
If you are concerned about how to find the right PEO to partner with, there is a solution for that too. NetPEO is a network of trustworthy PEOs. When you schedule a free consultation with NetPEO, one of our brokers will meet with you to get a firm understanding of your business needs and goals. Then, we select potential partners from our extensive network as co-employer recommendations.
Instead of spending hours researching and reviewing PEOs, you can just examine the recommendations curated specifically for you from NetPEO and decide which is the best fit for your business.
We give you continued support even after you make your final selection. Your broker will guide you and your PEO partner as you develop the specifics of your co-employment agreement. Should problems arise, they will help you work these issues out. If you decide it would be better to work with a different partner, your broker can help you transition to the next partnership.
With NetPEO, Multi-State Employers Are Set Up for Success
As a multi-state employer, you know the unique administrative challenges these kinds of businesses experience. Failing to navigate these challenges effectively can prevent you and your business from thriving. Do not put your business at risk or spend your own valuable time and energy by taking on frustrating administrative tasks.
While you manage the everyday operations of your business and employees, the PEO will keep the important behind-the-scenes activities running successfully. Connect with NetPEO to find the right PEO partner for your multi-state business.
