Q. How has the current contracted economy impacted the PEO industry and its clients in Florida? Aside from the clear effects on the housing and construction segments, what other types of Florida employers have most needed your help?

A. This is a very interesting question. Construction clients and those PEOs serving the construction industry have been impacted by the market downturn. The same can be said about restaurants, retail, and the like. However, what we are seeing is that clients who have firm partnerships with their PEOs are now relying on them for more human resources and compliance guidance and support. Also, companies that would not have considered engaging a PEO in the past now see PEOs as a way to outsource many of their human resource functions, thereby decreasing their costs. So while the market is creating adversity, it is also creating some opportunity.

Q. Much of the advice you must now provide employers involves the legalities of downsizing, instituting layoffs, reducing work hours, furloughs, and the like. Draw that picture for us.

A. Nobody likes or cares about attorneys or human resources experts until they need them — then they love them. This is what we are seeing. Clients who are going through the agonizing process of reducing their workforces need expertise and guidance to do it correctly and as fairly as possible. PEOs have certified human resources specialists who are well-versed on these processes and the legal considerations related to them.

Q. Do you feel that the long-debated issue of “joint employment” regarding PEOs and worksite employees is finally clearly defined in the new version of the Family and Medical Leave Act (FMLA)?

A. The prior U.S. Department of Labor's (DOL) FMLA regulations were written approximately 14 years ago, at a time when many regulators did not have a sufficient understanding of the PEO industry. The new FMLA regulations, which went into effect on Jan. 16, reveal that the DOL now understands the PEO industry.

In the new regulations, the DOL recognizes that many PEO relationships do not involve “joint employment,” but instead involve relationships that the PEO industry refers to as “administrative-employer” relationships. The DOL states in the new regulations that where a PEO performs administrative functions such as payroll, benefits, regulatory paperwork and updating employment policies, a joint-employment relationship is not created and the client of the PEO would not be subject to the FMLA — unless the client itself employs 50 or more employees within a 75-mile radius.

Most, and likely all, of our member PEOs structure themselves and their processes in a manner that reflects a co-employment relationship.

Q. How have government regulations impacted the processing of I-9 forms for each employee covered by a PEO? What are some of the challenges in dealing with the Department of Homeland Security and the Social Security Administration regarding “no-match” letters questioning employee Social Security numbers?

A. The I-9 process hasn't really changed, and no-match letters are not new. However, I think increased scrutiny on these letters is there, and businesses are taking them much more seriously. There is a shorter timeline to rectify these letters, so PEOs need to guide their clients on how to handle them. The client company is the entity in the position to address no-match letters with its employees and to get them rectified.

Q. Health insurance is high on the list of what employers need from PEOs. Does your experience lead you to support any specific versions of the health coverage proposals being debated at the state and national levels? Even at this stage of the discussion, can you picture how more state and federal government participation in health-care coverage could affect you and your clients?

A. I believe it is premature to be able to understand all the versions of health coverage being debated because everything is changing with the new administration. I do not doubt that there will be a serious debate about increasing health coverage at the state and national levels. What the result of this debate will be remains to be seen.

Regarding the second question, it is hard to picture what will happen. It seems that more government participation is rarely a good thing and full of unintended consequences. My fear would be the gap between what a specific plan looks like on paper and what the reality would be. How many times have we seen that with government involvement?