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Employee issues for companies with 1-4 employees

I am working with small clients with no employees currently but getting ready to hire their first 1-4 employees. What is the best way to address all of the various issues regarding payroll, payroll taxes, workers comp, health insurance and all of the compliance issues that go along with having employees? Does it make sense to go to a PEO and let them handle all of this even with the additional cost so the the business owner can concentrate on growing the business? Should we try to do it through the accounting firm? Are there alternatives to a PEO? Someone we know has recommended Justworks as a company that would be worth talking to about these issues. Has anyone worked with them and if so what do you think? Do you have any other recommendations? Thank you.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

If you have selected a well supported accounting system, they should be able to handle your payroll and tax payments. So someone will just have to manage running the payroll and sending the payments (most states require electronic payments these days, as does the IRS).

Your CPA firm would want to see the quarterly PR returns. Talk to them about the mandatory paperwork that is necessary in your state, keep them up to date.

Healthcare, not much choice in the marketplace but sign up everyone and make monthly payments.

Should you have an employee manual, yes/no - talk with your General Counsel.

Last issue: Always document issues with the employee. Major issues have them sign-off on receipt of your findings (ie, they received the report, not that they necessarily agreed with them). Document raises and when effective.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

I wrote a blog on Tips for working with a PEO, in June 2012, "A PEO is not a “Set it and Forget it Process.” It was also posted on this site.

Personally, I like them. They serve a value until it makes economic sense to bring the processes in-house.

Good luck.

Mark Perlin
Title: Business Consultant
Company: Self Employed
(Business Consultant , Self Employed) |

Wayne and Regis, Thank you for your feedback. It is appreciated. Regis, I read your blog. It was helpful. For this client I think the right way to go is PEO. Now the issue is finding the right one for a company with so few employees. Thanks again.

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