Should You Partner with A PEO? Can a PEO help your small business?

Understand the Importance of What PEOs are Doing for Their Clients; Consider what a PEO can offer your small business; Having a business relationship that benefits you!

Check out the article below to see how PEOs work to protect small business clients

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THE EXPANDING PEO WHEELHOUSE: HELPING SMALL BUSINESSES SURVIVE

COVID-19: STORIES OF ADAPTATION: HOW SERVICE & DELIVERY CHANGED

BY KATHRINA SALADRIGAS

Eighteen weeks have passed since we sent our first COVID-19 newsletter to Regis HR Group clients. Looking back, we could not have anticipated the scope of support our clients would need. In addition to inquiries about traditional human resources matters, we received an unprecedented number of questions about general business operations from employers, to the point of, “What can we do to survive?”

PEOs are uniquely positioned to help our local economies (and the country as a whole) recover from the pandemic, so here are some of things we hope all PEOs will implement to help their worksite employers overcome the challenges of the COVID-19 pandemic.

EMPLOYERS DESERVE A BETTER ANSWER THAN ‘THAT’S NOT WHAT WE DO’

Laws such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families First Coronavirus Response Act(FFCRA) are being passed and subsequently changed at an extraordinary rate, so employers are reasonably overwhelmed:

  • What government-sponsored financial relief is available to our business?
  • How do layoffs and furloughs affect health benefits?
  • Is our business an “essential” business?
  • Who is eligible for sick leave under the FFCRA?
  • Do we have to close our facility if an employee tests positive? If yes, for how long?

This is a very small sample of the questions creating uncertainty and anxiety for business owners. While some of these questions are business-specific and can only be addressed by the employer’s legal counsel and/or tax professional, there are practical steps PEOs can take to support these employers without defaulting to “that’s not what we do:”

  • We’ve learned that monitoring regulatory changes and providing brief descriptions (one to three sentences) with links to the governing body in a timely fashion reassures clients that they have a trusted partner to lean on and reduces worries about missing something.
  • Similarly, sharing a finite list of well-researched government resources that consolidate information from multiple regulatory bodies (such as the Centers for Disease Control and Prevention (CDC) Resuming Business Toolkit​) saves employers time and reduces the incidence of misinformation.
  • We’ve learned that employers appreciate live interactive webinars where they can connect with employment lawyers and tax professionals. To this end, Regis HR Group has sponsored eight webinars (at no charge to PEO clients) with topics ranging from FFCRA requirements to Payroll Protection Program (PPP) loan forgiveness, with additional webinars scheduled in the upcoming weeks.
  • Perhaps most importantly, we’ve witnessed the significance of the human connection (albeit socially distanced). Our entire team, from our payroll specialists to our president, has proactively worked to check in with our clients and ask, “How can we help?” Often, the answer is not something in our traditional scope of services, but we’re committed to do what we can.

HELPING EMPLOYERS ADJUST TO THE ‘NEW WORKPLACE’

The pandemic has created a seismic shift in our traditional workspace. Whether or not this shift is temporary remains to be seen. In the meantime, however, employers are finding it difficult to adjust to the new workplace.

To help mitigate the stress that accompanies these significant changes, we have provided several tools to educate employers and their managers about how to get the most out of their employees in remote work environments, how to maintain employee morale, and how to continue to communicate effectively as a team.

Some employers find themselves in a position to reopen, but their pre-pandemic staff is refusing to return. We are helping these employers find qualified staff, often by connecting them with employees who have been laid off by other clients.

For clients that are hiring during this ordeal, we are sharing resources on interviewing best practices and, in particular, educating them about the importance of behavioral interview questions.

While it has long been commonplace to ask behavioral interview questions to assess a candidate’s problem-solving skills, resiliency, and adaptability in demanding/high-stress work environments (such as healthcare, investment banking, and hospitality), the pandemic has demonstrated that these skills are central to the success of every business.

To that end, PEOs should be encouraging employers to ask behavioral interview questions, in addition to assessing candidates on previous experience—because past behaviors can help predict future performance. Examples of behavioral questions include:

  • “Tell me about a chaotic situation you experienced in a professional setting.”
  • “Describe a time that, despite your best efforts, things did not work out as you had envisioned.”

FACILITATING REPORTS FOR PPP FINANCING & MEANINGFUL BUSINESS CONNECTIONS

Lenders participating in the Payroll Protection Program, which helped businesses across the United States maintain their workforces during the COVID-19 crisis, required employers to submit payroll reports quickly and accurately.

In addition to producing detailed payroll reports that included employee salaries, wages, commissions, cash tips, group health benefits payments, retirement benefits payments, state or local taxes, etc., Regis HR Group was able to help small businesses connect with local, community banks participating in the Small Business Administration’s PPP loan program.

Our clients thanked us for these introductions because community bankers were often more helpful with questions about PPP loans and more responsive than their counterparts working for national banks. Similarly, the community banks were thankful for the introductions because, prior to the pandemic, many of these employers had not considered partnering with a local bank for their routine banking and financing needs.

WE ARE IN THIS TOGETHER

COVID-19 remains a clear and present danger, but we are confident that working together, our country will overcome this crisis. We are motived by the dedication of our team and inspired to work harder each day to earn the gratitude of our clients.

Moving forward with the support of PEOs across the nation, we can serve our clients in new ways and emerge stronger from this pandemic.

KATHRINA SALADRIGAS

Marketing & Talent Acquisition Director

Regis HR Group

Miami, Florida

How Are Employers Protected From Covid-19? Now Is The Time To Understand Your EPLI Coverage!

What can we learn from the first COVID-19 related suit filed against Walmart in March 2020? What the claim identified as Negligence.

See article below to ensure these considerations are built into your COVID-19 Returning to Work Strategy and Your Company’s Action Plan on handling everything COVID.

What does your EPLI policy cover? Important policy line items and questions ask to understand your coverage.  When does my PEO EPLI kick in, what is the WARN Act Exclusion specific to my policy, etc

Read the below to know the right questions to ask about your EPLI coverage.

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The COVID-19 pandemic has forced employers across the country to rapidly make numerous and significant decisions about how to manage their business in this unprecedented time. Employers have had to quickly develop and implement policies and procedures addressing remote work, layoffs, furloughs, pay cuts, workplace conditions, and a host of other issues. Not surprisingly, we’re already starting to see COVID-19-related lawsuits being filed against employers.

The first suit was filed against Walmart by the estate of an employee who passed away due to complications of COVID-19 on March 25, 2020. The complaint alleged that store management knew that several employees and individuals at the store were exhibiting symptoms of COVID-19. Nevertheless, the estate alleged, Walmart was negligent in the following respects:

  • Failing to cleanse and sterilize the store in order to prevent infection of COVID-19;
  • Failing to implement, promote, and enforce federal and state social distancing guidelines;
  • Failing to provide the decedent and other employees with personal protective equipment such as masks, latex gloves, and other protective devices;
  • Failing to warn the decedent and other employees that various individuals were experiencing symptoms at the store and may have been infected by COVID-19, which was present and active within the store;
  • Failing to adequately address or otherwise ignoring other employees who had communicated that they were experiencing signs and symptoms of COVID-19;
  • Failing to follow Department of Labor and Occupational Safety and Health Act (OSHA) recommendations;
  • Failing to follow CDC guidelines to keep the workplace in a safe and healthy condition and to prevent employees and others within the store from contracting COVID-19;
  • Failing to develop an Infectious Disease Preparedness and Response Plan as recommended by the CDC;
  • Failing to prepare or implement basic infection prevention measures as recommended by the CDC;
  • Failing to conduct periodic inspections of the condition and cleanliness of the store as recommended by the CDC;
  • Failing to provide employees with antibacterial soaps, antibacterial wipes, and other cleaning agents as recommended by the CDC;
  • Failing to develop policies and procedures for prompt identification and isolation of sick people as recommended by the CDC;
  • Failing to develop, implement, and communicate to its employees about workplace flexibilities and protections as recommended by the CDC;
  • Failing to implement engineering controls designed to prevent COVID-19 infection including, such as installing high-efficiency air filters, increasing ventilation rates in the work environment, and installing physical barriers such as clear plastic sneeze guards, as recommended by the CDC;
  • Failing to cease operations of the store and to otherwise close the store when it knew, or should have known, that various employees and others present at the store were experiencing symptoms of COVID-19;
  • Failing to properly train personnel to implement and follow procedures designed to minimize the risk of contracting COVID-19;
  • Failing to periodically interview and/or evaluate employees for signs and symptoms of COVID-19;
  • Failing to prohibit employees who were exhibiting signs and symptoms of COVID-19 from working at the store or otherwise entering the premises; and,
  • Hiring employees via telephone and other remote means in an expedited process without personally interviewing or evaluating whether prospective employees had been exhibiting signs and symptoms of the COVID-19 prior to the commencement of their employment.

A second wrongful death lawsuit was filed in Texas state court against a meat packing company following the death of a forklift driver at the defendant’s plant. Plaintiffs alleged that the decedent was told he would be laid off if he didn’t report to work—despite exhibiting symptoms of COVID-19—and that the defendant “refused to take the pandemic seriously, and kept its functions as normal, taking no precautions and implementing no protocols for the safety of its workers.” The plaintiffs further alleged that, “[a]round April 8, 2020 it had become very clear that people in the factory were sick, and that Covid-19 was among them – factory owners and managers played the fiddle. [The decedent] contracted the disease at work, was forced to separate from his partner and children, in order to protect them, and then – became part of the statistic of over 60,000 people who have died in the USA since the pandemic took hold.” The plaintiffs asserted claims for negligence and wrongful death asserting the defendant failed to:

  • Supervise the environment, placing protocols, providing and requiring masks, gloves, and enforcing six feet social distancing as per CDC and local orders;
  • Provide safety tools and equipment that is the basis of this lawsuit;
  • Ensure company premises were maintained in a way to prevent illness and injuries to its employees;
  • Supervise the employee’s activities as per CDC and Dallas County protocols;
  • Warn employees as to the hazards of their employment post COVID-19 pandemic;
  • Install, adopt, or employ adequate safety measures to prevent COVID-19 incidents.

Undoubtedly, these lawsuits are just the tip of the iceberg. See, e.g., “2 Utah County businesses told staff to ignore COVID-19 guidelines, resulting in 68 positive cases,”Daily Herald, May 5, 2020 and “A Detroit Nurse Was Fired After Speaking Out About Her Hospital’s Handling Of The Coronavirus Outbreak. Now She’s Fighting Back,” Buzzfeed News, April 21, 2020. As more organizations attempt to reopen in the absence of a coronavirus vaccine, we will likely see a substantial wave of employment-related COVID-19 lawsuits, leading to claims under Employment Practices Liability Insurance (EPLI) policies.

We consider some of the likely EPLI coverage issues below.

COVID-19 EPLI Coverage Issues

We note at the outset that there is no standard EPLI policy, and coverage terms, conditions, and exclusions vary considerably. Accordingly, review of the precise language of the particular policy will be required. When considering COVID-19 EPLI claims, insurers should pay special attention to the following issues:

Notice

Although timely notice of a claim is a critical threshold issue under virtually every insurance policy, it can be particularly challenging in the EPLI context where verbal communications with employees could constitute notice under certain policy forms. Policy requirements for notice of claim and notice of circumstances, if applicable, should be closely considered in the context of the information provided by the insured. Since EPLI policies are typically written on a claims-made basis, it’s important to make sure the claim was reported within the timeframe specified in the policy. Prior notice issues also should be considered. Decisions concerning the disposition of notifications under EPLI policies should be consistently made, timely, and well documented.

Employment Wrongful Act

Another threshold issue to be examined is whether the claim falls within the policy’s definition of an “employment wrongful act.” Keep in mind that many EPLI policies contain manuscripted provisions, so it will be important to carefully review the entire policy and endorsements. The impact of COVID-19-related governmental orders may also need to be evaluated in connection with any claim. When considering claims brought against the insured by non-employees—such as customers, clients, and vendors—it will be important to ascertain whether the policy extends coverage to third-party employment practices.

Bodily Injury Exclusion

Bodily injury claims are typically excluded under EPLI policies, although such exclusions often contain an exception for emotional distress or mental anguish claims. Distinctions between exclusions for claims “for bodily injury” versus claims “arising out of bodily injury” could be important in some instances.

OSHA and FMLA Violations

COVID-19 claims for actual or alleged OSHA and Family and Medical Leave Act (FMLA) violations may be subject to OSHA and FMLA exclusions. Those exclusions typically will have a carve-out for related retaliation claims, such as an allegation that an employee was impermissibly laid off after exercising OSHA or FMLA rights, so careful review of the claim is imperative.

Wage and Hour and FLSA Claims

Most employers have instituted new work routines for their employees as result of COVID-19 and related government orders, including work from home, self-quarantine requests, procedures concerning time capture, and new work schedules. This could lead to compensation disputes giving rise to Wage and Hour and Fair Labor Standard Act (FLSA) claims. Depending on the terms of the policy, such claims may be excluded entirely, covered only for defense costs, or fully covered.

WARN Act Exclusion

In light of widespread COVID-19 layoffs and furloughs, employers are likely to face wrongful termination lawsuits. While EPLI policies generally cover claims for wrongful termination, retaliation, and discrimination, claims for Worker Adjustment and Retraining Notification (WARN) Act violations typically are excluded. The policy, however, may contain “employment events” coverage, which is triggered by terminations affecting a specified percentage of the workforce, i.e. 10-15% of employees.

Criminal and Fraudulent Acts Exclusion

Depending on the particular facts giving rise to a claim, a policy exclusion for malicious, fraudulent, and criminal acts or omissions may apply. The exclusion should be carefully reviewed with regard to the timing of its application; many exclusions are not be triggered until there is an adjudication of the deliberate act or omission. The exclusion may also have a carve-out for defense costs. An insurer’s reservation of rights concerning these issues should be carefully considered in light of the allegations at issue, the precise policy language, and the applicable law. Insurers should also check for potentially relevant exclusions for punitive and exemplary damages.

Issues Arising from PEOs

A growing number of today’s companies utilize the services of professional employer organizations (PEOs) to manage certain human resources functions and related administrative functions. Depending on the services provided by the PEO (for example, whether the PEO is the employer of record or a co-employer) and the legal relationship between the insured company and the PEO, a variety of issues impacting coverage under an EPLI policy may arise. Coverage for any given claim may also implicate the PEO’s EPLI policy, so insurers should review their policy’s “other insurance” provision, which may need to be addressed when considering its defense obligation and reserving rights.

Injunctive and Equitable Relief

Employers should anticipate lawsuits demanding they implement certain actions and/or make accommodations to remedy alleged unsafe employment practices and workplace conditions, including for employees who are members of a protected status. Typically, EPLI policies do not cover costs to comply with injunctive relief, costs of accommodations associated with disabilities, or other protected status, benefits due, or salary obligations. Front pay and back pay, however, are often covered in the policy’s definition of “loss.” These issues should be kept in mind when evaluating coverage and reserving rights.

Final Thoughts

EPL insurers should anticipate an increasing number of COVID-19-related claims , particularly as many companies are taking steps to reopen their businesses. In this regard, it’s worth noting that as an added benefit to policyholders, some EPLI policies provide access to pre-claim legal advice services from qualified employment counsel. Given the wide range and high stakes of COVID-19 risks confronting employers, some insurers have reminded their policyholders about taking advantage of this service.

credit to original article: https://www.jdsupra.com/legalnews/early-covid-19-liability-suits-raise-31472

written by: Hinshaw & Culbertson – Insights for Insurers