Complying with Employment Laws

Employers are required to comply with all applicable employment laws and regulations. This includes verifying eligibility of employment, paying at least minimum wage, withholding taxes and filing taxes with the appropriate state and federal agencies, providing health benefits when employing a number of employees over a certain threshold, developing workplace policies, and complying with wage and hour laws (properly classifying employees as overtime eligible or overtime ineligible, tracking wages correctly, etc.). This can be a lot of work for smaller companies or individual business owners. Many business owners use a professional employer organization (known as a “PEO”) to handle this aspect of the business. PEOs serve as a joint-employer with the business and share in the employment responsibilities. The PEO will typically administer payroll and benefits, handle taxes and withholdings, advise on compliance and other human resources (“HR”) matters, and even handle workers’ compensation. Many small businesses will start by engaging a PEO to support the company until they grow to a size at which they can start hiring internal professionals to service the HR and payroll functions.