Guest Blogger Mike Haberman of Omega HR Solutions
Mike Haberman has been in the human resources industry for 35 years, where he has held positions as a practitioner and a consultant to small businesses. In addition to consulting, he has been writing human resource blogs for almost a decade and has written approximately 1700 blogs to date. He also teaches certification preparation classes at The University of Georgia, participates in human resources webinars, and occasionally speaks at HR related conferences.
My thanks to Scott Soder for inviting me to contribute to this blog and share some of my insight on human resources and PEO’s. I met Scott approximately three years ago (prior to the creation of StaffMetrix,) when his sole company was PayMetrix HR, which offers its clients payroll and human resources services. PayMetrix HR was running into situations where their payroll clients needed more than just payroll advice; they needed HR advice, and that was the genesis of StaffMetrix HR. Scott found that the company’s clients had questions that were greater than just payroll, which is when I was brought in to provide expert HR advice to his clients until the creation of StaffMetrix HR.
Currently I work primarily with companies that have fewer than 100 employees and have no professional or human resources person in their organization. Typically it’s the office manager, company owner, or accounting manager handling all of the companies’ HR responsibilities. Frequently, that individual has payroll responsibilities and someone in the company decides that payroll falls under human resources, and then gives that individual other HR responsibilities. These employees typically struggle with these responsibilities because it’s not their area of expertise. They don’t have the time to learn what it takes to manage human resources effectively. HR is a huge area of responsibility; one that is constantly changing; laws may stay in place but they don’t remain static. HR is a constantly changing arena with a lot of detail that is associated with it.
Currently, my major areas of focus are compliance issues. One of the most common compliance mistakes companies make is associated with the Fair Labor Standards Act. Companies are not paying their employees correctly. Unfortunately for these companies (and even for some companies who are paying employees correctly), the US Department of Labor is now revising the Fair Labor Standards Act, and it could significantly affect many companies. The US Department of Labor is changing the definition of an exempt employee and the requirements for what it takes to be an exempt employee. This will put many companies in a complicated predicament. They will be required to provide job descriptions and justifications for the employees that remain exempt. These companies are going to have to change many of their current employees who are exempt, to non-exempt–or they are going to have to raise the amount of money they are paying them in order to maintain that exemption. I predict that by the end of summer we will hear from The Department of Labor about the revision of the Fair Labor Standards Act, and a lot of companies will need to reevaluate all their employees that are currently exempt and determine if they can maintain that exemption.
Another compliance issue is wage errors. Companies aren’t accurately tracking employee hours or paying overtime correctly. These companies typically have employees that are salaried, and they have the assumption that because they are salaried, they don’t have to pay these employees overtime. This is an incorrect assumption. You can have both hourly employees and salaried employees, but there is a middle category, too. You can have a salaried non-exempt employee: which means that despite their salaried status, if they work more than 40 hours a week, employers are required to pay them overtime. In order to do this, employers have to correctly track employee hours. A lot of companies are not tracking time properly, and if they are caught, they end up with a large bill of back wages they have to pay, and sometimes even a class action suit.
For a small company that doesn’t have HR administrators, a PEO brings the organization an in house expertise they lack, PEO’s have the people and resources to get questions answered and to create solutions. For companies in all industries, the value that goes along with a PEO is the access to Fortune 500 Employee Benefits, Workers Compensation Insurance and 401k Retirement plans. The insurance market is changing dramatically which makes a PEO option even more attractive as it creates longer term stability while typically providing some cost savings to the business. As an organization grows, they can reevaluate company size and administrative fees of the PEO–but prior to that growth, smaller companies can get HR expertise by signing up with a PEO.
To learn more about Mike Haberman or read his blog, visit http://omegahrsolutions.com
To learn more about the PEO services StaffMetrix HR can offer your company, feel free to get in touch with us by leaving a comment below.