Welcome To the Employees Only Blog

As of January 1, 2012, Michigan changed the way companies like Employees Only do business. While we are a Human Resource Management firm, one of our solutions for clients is termed PEO, or Professional Employer Organization, we and those in our industry who provide human resource services and staffing to clients all over the spectrum are also referred to as Employee Leasing Organizations or Employee Leasing Companies. Regardless of the title, the way we’re doing business is being altered through legislation called the Professional Employer Organization Regulatory Act. This new legislation states that all PEOs—minus providers of temporary help services or specific independent contractor arrangements—must now be licensed by Michigan’s Department of Licensing and Regulatory Affairs (LARA) by September 1 of this year, 2012. The process of applying for a license really won’t matter to the folks we staff out or to the businesses hiring us, but changes in contracts we offer because of this legislation. For instance, any contract we offer post-September 1st will have specific terms that must be included. For example: • The responsibility of the PEO and the client to pay wages, to withhold taxes, including unemployment taxes, and to make employee benefit payments for covered employees. • The responsibility of the PEO and the client to hire, discipline, and terminate employees. • The responsibility of the PEO and the client to comply with Michigan’s Worker’s Disability Compensation Act. There are also other implied terms and obligations we may have to include (unless expressly listed to the contrary): • The client is solely responsible for the quality, adequacy, or safety of the goods or services produced or sold in the client’s business. • The client is solely responsible for the acts, errors, and omissions of its employees, including the directing, supervising, training, and controlling their work, unless acting under the express direction and control of the PEO. • All employees will be considered the client’s employees for purposes of general liability insurance, fidelity bonds, surety bonds, employer’s liability not covered by worker’s compensation, and/or liquor liability insurance. • A client and a PEO are each considered an employer for purposes of sponsoring retirement and welfare benefit plans for its covered employees. • Employees whose services are subject to sales tax are considered the client’s employees for purposes of collecting and levying sales tax on the services performed by the employee. • Taxes assessed on a per capita or per employee basis are to be assessed against the client. This legislation is something Employees Only takes very seriously, especially since there are penalties for any violations. This will also be an ongoing change since some of the legislation has been left open to interpretation. If you have any questions about the Professional Employer Organization Regulatory Act, please feel free to Contact Us here.