It’s always good to think about the future. With a 401k (a type of voluntary retirement benefit), an employee can choose to make contributions from his paycheck to a retirement fund.


The Affordable Care Act, more famously known as Obamacare is a federal law that became effective in 2010, requiring all American citizens to be covered by health insurance. ACA, encompassing health insurance coverage, health care costs, and preventive care, has the primary goal of making affordable health insurance available to more people.


An administrative fee or service fee is a monthly fee charged to their clients by the PEO. It can be a fixed dollar amount per employee per month (PEPM) or a percentage of your gross annual payroll.


The Employer of Record in a co-employment relationship, in other words, the PEO is the administrative employer in the co-employment relationship. This doesn’t mean the PEO has suddenly become your boss, but instead that they will be responsible for all HR administrative tasks and compliance, including but not limited to tax payments, payroll processing, unemployment and WC claims. No need to feel like you are handing over the keys to the castle. You, the PEO client maintains full direction and control of your company.


Also known as Voluntary Benefits, this refers to additional insurances that cover miscellaneous medical expenses such as vision, dental, STD (Short Term Disability), LTD (Long Term Disability), critical illness insurance, pet insurance, Life, Group Life, 401k, FSA, HSA, hospital indemnity plan such as AFLAC or other similar programs; to name a few.


An applicant tracking system (ATS) is software designed to help a company recruit employees in the most efficient way possible. You can use an ATS to post job openings, screen resumes and schedule interviews with potential employees.


While carving out is something you do at Thanksgiving Dinner or wood-working class, this term actually refers to a hybrid PEO arrangement where the client company still maintains their own workers’ comp policy or health insurance policy instead of obtaining coverage through the PEO’s master policy. This will occur when you simply already have an attractive policy in place, so why would you mess with a good thing? But no worries, the PEO can still assist you with the administrative side of your own policy.


This voluntary benefit allows employees to use pre-tax funds for extra expenses. In this case, the money is used for childcare costs the employee incurs while at work, or for adult daycare expenses for elderly family members who live in their home.


Often referred to as workers comp code or class code. These codes classify the risk exposure of your employees’ job duties and classifies the type of work being performed. The classification code provides an associated code so that premium rates can be established in accordance to the work’s level of risk.


No, it’s not about finding a venomous snake in your facilities. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives qualifying employees and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time. This way, you won’t be leaving your former employees without coverage.


A Certificate of Insurance is a document issued by an insurance company that certifies that an insurance policy has been purchased by a specific party. You can’t use this as a substitute for the actual policy, but it is proof that you’ve got insurance. (As if your monthly premiums aren’t proof enough.)


Hate your commute? Guess what, so do most people but at least commuter benefits (another type of voluntary benefit), AKA qualified transportation fringes, take off a little of the sting of sitting in traffic or hours on the subway. These benefits are a pretax benefit that allows employees to put aside pretax dollars to pay for the cost of commuting to and from work even including parking etc. Like all good things, the IRS does put a limit on these benefits, so a helicopter commute is probably out of the question.


Effective June 1st, 2017, a Certified Professional Employer Organization is one who’s been certified by the IRS. Like everything else the IRS oversees, becoming qualified as a CPEO involves lots of paperwork, applications and a strict background check. To read more about this, click here


A refund of premiums for workers’ comp policies. How cool is that? It’s almost like getting free money! The refund is paid when the claims of the members on the plan did not exceed the premium payments. Dividends are offered, but not guaranteed, by some PEOs.


The U.S. Department of Labor, (some of you may know them as Big Brother, because the DOL is always watching). In reality, the DOL is there to promote the welfare of job seekers, wage earners, and retirees by improving their working conditions, advancing their opportunities for profitable employment, protecting their benefits, and helping employers find workers. The DOL also protects workers’ rights to safe working conditions, a minimum hourly wage and overtime pay, freedom from employment discrimination, unemployment insurance, and other income support. What you have to know: treat your workers well and the DOL won’t be a problem for you.


An Employee Assistance Program is a work-based intervention program designed to help employees resolve personal issues that may be negatively impacting their performance at work. Common problems an EAP can help with include alcoholism, smoking cessation, behavioral therapy, crisis management, grief counseling and more.


The Equal Employment Opportunity Commission is a federal agency charged with ending employment discrimination in the United States. The EEOC can bring lawsuits against employers on behalf of alleged discrimination victims. So make sure you always hire fairly!


“Experience modifier” is a rate modifier used by the NCCI (National Council for Compensation Insurance) to define the risk of a particular employer. Obviously, the guy who cleans skyscraper windows will have a higher risk than the one who changes the paper in your copy machine.


Any other voluntary benefits or perks an employer offers. It can include a flexible schedule, paid sick days, performance bonuses, employee discount programs, gym membership and anything else your employees would be thrilled to have. I’m thinking a Froyo bar would be a nice addition, no?


Don’t worry; this isn’t a bunch of CEOs knocking on random doors and asking intrusive questions. Rather, it’s a report prepared by an employer that provides the insurance companies the necessary data for the underwriters to determine insurance and benefit rates. In addition, an Employee Census may also help ensure that a company’s retirement plan is in compliance with Department of Labor laws and Erissa Laws.


Remember that thick student handbook they gave out in high school? This is kind of the same thing. Sometimes known as an employee manual, staff handbook, or company policy manual, this handbook is distributed to employees and details the company culture, policies, and procedures.


Employers Practices Liability Insurance is insurance purchased by an employer to protect himself/herself against errors in willful and accidental employer practices,such as wrongful termination, harassment or other ugly situations that can come back to bite you. This way you’re never at risk of losing a year’s profit on one lawsuit! Thankfully, this is something that is usually included and provided to you as part of the services you get when you sign up to partner with a PEO.


The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industries. You don’t need to fund their retirement cruises, but you do have to give your employees enough to live on in their golden years.


The Federal Insurance Contributions Act (FICA) tax is a United States payroll tax imposed on both employees and employers to fund Social Security and Medicare. You have to know that money for these programs is coming out of someone’s pockets, and in this case, it’s yours.


The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards for full-time and part-time workers in the private sector and in all levels of government. And while child labor is a thing of the past in the US, many of these other things can be a real problem for a business owner who doesn’t comply.


We all think family is important, and thankfully for your employee, the government thinks so too. Covered employers must grant employees up to a total of 12 work weeks of unpaid leave during any 12-month period for one or more of the following reasons: the birth and care of a newborn child; placement with the employee of a son or daughter for adoption or foster care; caring for an immediate family member with a serious health condition; medical leave when the employee is unable to work because of a serious health condition.


A Flexible Savings Account (FSA) is another type of voluntary benefit, i.e., a pre-taxed account used to pay for out-of-pocket health care costs. But be aware there is a limit on how much you can claim towards this account.


This one sounds waaaaay cooler as an acronym. The Federal Unemployment Tax Act authorizes the IRS to collect a federal employer tax to fund state workforce agencies, as well as half of the cost of extended unemployment benefits.


You’re probably familiar with HIPAA (could they get anymore letters into this acronym or what?), from the pile of papers you are always made to sign when visiting any doctor. But what you may not have known this multi-letter acronym standing for the Health Insurance Portability and Accountability Act can affect you as a business owner, because besides protecting your privacy at the doctor it also protect personal information and data collected and stored in company records. You never want your employees’ medical information being compromised.


HR gone high-tech! HRIS is an online solution or software used for data entry, data tracking and the information requirements of a business’s HR management, payroll and bookkeeping operations. An HRIS will help your company process employee onboarding, I-9, W-4, W-2s, employee information, open enrollment, benefit administration, hiring and termination, and so much more….It’s HR at your fingertips, something any business owner can appreciate.


The I-9 is a form required by the Immigration and Naturalization Services to verify your employee’s identity and work eligibilty. Your employees cannot be put on payroll until they’ve submitted this form. In simple English: no paper, no pay.


These workers may do work for you but don’t work FOR you, hence the term independent. Because they are not your employees, they are not on your payroll. Therefore, income tax is not withheld from their pay. These are known as 1099 workers, referring to the form they receive at the end of the year, instead of the good old W-2.


This is exactly what it sounds like – a description of a job. Seems simple enough, but don’t it let that fool you. It should include all responsibilities and obligations, as well as the purpose, scope, and working conditions of an employee’s job, along with the job title and the name of the person to whom the employee reports.


These are reports provided by your insurance company that document the claim activity on each of your policies. Think of it as your scorecard of how much you could be losing if you weren’t insured.


This chunk of tax on every paycheck goes to fund Medicare – the health insurance program designed for people 65 years and older. You may not like it now, but we’re sure you’ll appreciate it at 65!


These terms refer to the act of absorbing a new employee into your company. It includes all training, guidance, orientation, benefit elections, completing documents such as I-9, W-4, etc., and the entire learning process involved in the employee’s new position.


This is the only time of year for employees to add, reduce or change health insurance coverage without any qualifying events (see the definition of Qualifying Event below). Insurance rates will also usually change at this point.


You probably think of OSHA as the people who come in to clean up the mess after any disaster, but in reality the Occupational Safety and Health Administration is a division of the DOL and was created to prevent all work-related injuries, illnesses, and death through enforced workplace safety rules. Gotta keep those workers safe at all cost!


This is the ongoing process of communication between a supervisor and an employee throughout the year. It helps keep employees in line with the company’s goals and vision, and it helps to keep you in touch with your workers. You can benefit greatly in this task by either partnering with a PEO which can provide performance management and crucial review technology. Alternatively, you can invest in a system that can do this for you, but then, you wouldn’t get all the other great advantages of a PEO, of course.


Paid Time Off is a policy that combines vacation and sick leave in one option. It basically gives your employees the choice of spending their days off nursing a cold or nursing a fruity umbrella drink while vacationing in Aruba. Again, a PEO’s HR representative can assist you in implementing your PTO and advising you on the best practices.


Any change in an employee’s personal life that can impact their eligibility or their dependent’s eligibility for benefits outside of the open enrollment period (see the definition for open enrollment above). This can include loss of health insurance for any reasons BESIDES not paying your premiums or any other voluntarily termination of benefits, change in household size (i.e., marriage, divorce, birth, adoption, death), moving locations or changing or eligibility status. Other life-status changes may be considered a Qualifying Life Event.


You know what recruiting is – it means looking for the best candidate for a job. It includes analyzing the job requirements, working to attract employees, screening applicants, and then finally hiring new employees and training them in for their new role. What you may not know however, is that your PEO can actually help you with this.


This tax funds social security benefits. The social security program is the government’s way of skimming off paychecks during the working years, and then putting that money back in the tax-payer’s pockets when they need it during their golden years. Again you may not like it now….but hopefully if the program is still around, you’ll enjoy it during your golden years.


The State Unemployment Tax Authority is a state tax paid by the employer to fund unemployment benefits. Your SUTA rate will be based on your business’ overall claims experience.


A tax restart occurs when an employer begins employing employees under a new tax ID mid-year. According to government regulations, the tax wage limits will then restart, although the employer has already made contributions for social security, unemployment, and more. Partnering with a qualified CPEO (see our article HERE) may alleviate the tax restart headache.


Time and Attendance Systems track and monitor the hours an employee begins and stops working. It lets you see who’s always slipping in twenty minutes late and who’s clocking out early every Wednesday. It can even help you cut costs incurred by overpaying employees for hours they don’t work. It can also monitor an employee’s overtime compensation and track an employee’s PTO. A Time and Attendance System can be an old-fashioned timeclock or, any of the numerous apps or software programs designed for just this purpose. There are many different options and features of Time and Attendance Systems, but don’t worry, ARC Consultants can help you choose the best one for you.


All administrative tasks involved in unemployment claims. A PEO will take care of all that tedious paperwork and will help you protest the claims whenever possible. Because that’s just what they do….make your job easier and save you time and money.


Benefits that the employee elects to pay for on their own. Of course, while typically the employee pays for these benefits, the company will still need to administer these benefits which can be a huge HR burden. With a PEO, the PEO administers all the voluntary benefits relieving you from yet another HR burden. Plus, these benefits provide you a more attractive benefit package, which in return allows you to attract and retain top talent for your organization, without putting a big dent in your budget.


The W-2 form is a Wage and Tax Statement used in the US tax system to report on wages paid to your employees and on taxes withheld from them. (See Independent Contractor above)


We know, the tax forms don’t stop coming. The W-4 form is actually for the employer and payroll processor – it tells you exactly how much tax you should withhold from an employee’s paycheck. It bases this info on said employee’s marital status, the number of exemptions and dependents the employee has, and on several other factors.


Also called a WSE, a worksite employee is simply what a PEO will call your employees. Because the PEO will become the administrative employer for payroll, taxes and HR purposes, you become the worksite employer, as in the actual employer who is onsite making the day-to-day decisions and still maintaining control of your business. By default, your employees and therefore referred to as WSE’s.